Category: Maryland judiciary

With two recent political and legislative breakthroughs for Mayor Kurt Schmoke, Baltimore is becoming a model city for drug reform. In March, a $2.3 million federally funded Substance Abuse Treatment and Education Program (STEP), or “drug court,” began diverting nonviolent drug criminals from prisons to treatment programs. And on April 5, the Maryland State legislature passed a bill exempting Baltimore City from certain drug-paraphernalia laws and approving funding for a needle-exchange program called the AIDS Prevention Pilot Program. In a reversal of his earlier stance, Governor William Donald Schaefer supported the bill and is expected to sign it. The success of these two initiatives is a major priority for Schmoke, who is out to prove that what he calls a “medicalization” approach is the best solution for our multiple woes of drugs, crime, and AIDS.

The drug court and the rest of Schmoke’s immediate drug-reform measures appear to enjoy wide support here in Baltimore City. The City Council is almost unanimously behind the mayor’s initiatives. Baltimore’s public-health and drug-treatment providers, who stand to gain funding and stature from the initiatives, also generally approve of them. The new police commissioner, Tom Frazier, says needle exchange, the drug court, and expanded treatment will make his job easier. And of course Baltimore’s heroin and cocaine addicts – who make up about six percent of the population, according to Bureau of the Census figures – are all for it.

In fact, one gets the impression that the mayor’s local drug-reform agenda has been falling into place with relative ease. People tend to see needle exchange, the drug court, and expanded treatment as almost clinical prescriptions for treating the symptoms of the drug crisis.

It is Schmoke’s national long-term drug policy, with its overtones of decriminalization, that has attracted strong and vocal opposition.

By now, everybody knows that Schmoke advocates some form of drug decriminalization. To a lot of people, that strategy sounds so radical on the surface that they aren’t very interested in the details. For example, Lieutenant Leander Nevin, president of the Baltimore City Fraternal Order of Police, says the bottom line is that Schmoke “wants to legalize drugs and give away free needles,” and asks sarcastically, “It’s socialism, right?”

To Michael Gimbel, director of the Baltimore County Office of Substance Abuse, the details of decriminalization are insignificant compared to the impact of even talking about it. He sees a direct correlation between rising drug use in high schools and the whole debate over decriminalization, which Schmoke has persistently publicized for six years now.

“I think this whole discussion is more hurtful than helpful,” Gimbel says. “I have to deal with the kids today who believe in legalization only because the mayor or the rap group Cypress Hill said so. For the last ten years we have seen major decreases [in drug use] and changes of attitude. Now all of the sudden these kids are changing the way they looking at [legalization]. I have to deal with that, and I blame it on the legalization debate.”

Barring some undetected tectonic shift in public opinion over the last six years, Nevin and Gimbel are right in line with most Marylanders’ opinions of legalization. In 1988, The Evening Sun contracted a public-opinion research firm to survey a random sample of Marylanders over 18 years old to ask them whether they support drug legalization. The results were basically the same for Baltimore as for the whole state: less than 20 percent were for legalization, and more than 70 percent were opposed to it.

In spite of this opposition, Schmoke has high hopes for his long-term, national strategy, which he clearly does not want associated with the term legalization.

“My approach is not legalization, that is, the sale of drugs in the private market,” he told an audience of doctors and nurses at the Johns Hopkins School of Hygiene and Public Health in March. Rather, he proposes lifting a corner of the current blanket prohibition on illegal drugs by drawing addicts into the public-health system, where they could be maintained, if necessary, using drugs made available through a government market.

“The government, not private traffickers, would control the price, distribution, purity, and access to particular substances, which we already do with prescription drugs,” Schmoke told the audience. “This, mind you, would take most of the profit out of street-level drug trafficking, and it is the profits that drive crime. Addicts would be treated and, if necessary, maintained under medical auspices. In my view, street crime would go down, children would find it harder, not easier, to get their hands on drugs, and law-enforcement officials would concentrate on the highest echelons of drug-trafficking enterprises.”

Schmoke’s zeal for reform is coupled with a hardened distaste for drug prohibition.

“Drug prohibition is a policy that has now turned millions of addicts into criminals, spawned a huge international drug-trafficking enterprise, and brought unrelenting violence to many of our urban neighborhoods,” Schmoke said. “It was a flawed strategy when it began, and it is still a flawed strategy now.”

Legalization or not, the mayor’s approach is roundly dismissed by people who think any fiddling with drug prohibition would, as a sociobiologist might say, damage the antidrug “chromosomes” that have been grafted into society’s DNA sequence over the last few generations. One such person is Dr. Lee P. Brown, the director of President Clinton’s Office of National Drug Control Policy. In a statement on drug legalization last December, after U.S. Surgeon General Joycelyn Elders suggested that legalization would reduce crime, Brown commented that “[a]ny change in the current policy of prohibiting drug use would seriously impair antidrug education efforts, drug-free community programs, drug-free workplace programs, and the overall national effort to reduce the level of drug use and its consequences.”

Local opposition to Schmoke’s call to change national drug laws is every bit as pointed as the Washington establishment’s. Gimbel protests that decriminalization “is a real intellectual pipe dream, and it scares me because the mayor is very articulate in selling this program.” City Councilman Martin O’Malley, of the Third District, thinks it “just amounts to so much more intellectual bullshit.” Joyce Malepka, founder of the Silver Spring antidrug lobbying group called Maryland Voters for a Responsible Drug Policy, says, “There is no intellectual argument about legalizing drugs because anyone who is that short-sighted isn’t really experienced, and if that is the case, then there is certainly no business talking about it.”

One objection that Schmoke’s medicalization opponents make is that a prescription-based drug-treatment system for addicts would be ripe for abuse. Steve Dnitrian, vice president of the Partnership for a Drug-Free America, in New York City, argues that legal drugs are already abused and a wider array of them would lead to greater use and abuse.

“Take a look at the drugs that are already regulated medically, such as Valium,” Dnitrian says, by way of illustration. “Are they abused? Heavily. Medicalization would be the same thing. You would just be adding a couple of more flavors to the vast array of products we have right now to alter reality. If you make available a product that is not readily available, it is going to get used. Even people who favor decriminalization acknowledge that drug use would go up dramatically.”

Still, Schmoke has so far managed to buck the antidecriminalization establishment and remain in office. How has he done it?

One explanation is that his drug-reform strategy is multi-faceted and comprehensive, so many who oppose him on decriminalization or needle exchange agree with many of his other drug-reform ideas. For instance, his crusade for drug treatment on demand and the creation of drug courts is lauded from all corners, including by Malepka and Gimbel, President Clinton, and the antidrug advertising venture Partnership for a Drug-Free America.

Schmoke hasn’t got this far by smart policymaking alone, however. Part of it was political drive: he is on the line with this medicalization talk, so he has been campaigning hard to prove his is right; if he can’t, he risks losing legitimacy with the public. Frank DeFillipo, a political columnist for The Evening Sun, says, “Schmoke has a lot to defend. He is going to have to go out and defend that issue in the mayoral race, and there are compelling arguments against what he is advocating.”

On the mayor’s side are a significant number of individual legislators, doctors, lawyers, judges, and religious leaders – powerful people with connections to organizations that can effect change. Schmoke feels that the average voter may also be coming around to agree that we need a new strategy against drugs, crime, and AIDS, and that medicalization should be given a sporting chance. Depending on how he plays this issue during the upcoming mayoral campaign, Schmoke may bet his future in political office on that perceived trend. He has been making every effort to swing the Zeitgeist around. Given the poll-pending strength of his supporters, he just might be able to do it.

“My sense is that the majority of Baltimoreans may disagree with my conclusion about the need for medicalization and decriminalization,” Schmoke acknowledges, “but that they agree that I should raise this issue and am glad that I didn’t change my mind. And the overwhelming majority of people believe that the current approach is not working, but they are not sure which way we should go.”

Schmoke hopes to make medicalization an asset at the polls by plugging the effectiveness of the needle-exchange program and the drug court, although he is not sure the results will be in by election time. To bolster his position, he says he will stump medicalization as effective in its own right but even better when combined with community development and community policing initiatives.

“All those things add up to positive impacts,” Schmoke says, “and that is what I’m hoping will happen in the communities.”

Schmoke is confident that all of his attention to detail will pay off politically, because he is well prepared to discuss and defend his proposals. In short, he has a plan, so the burden of proof is on the opposition to propose a better one.

“I think that if somebody is going to raise it as an issue in the election and be critical of my positions,” Schmoke challenges, “then they are going to have to have an alternative, a substantive alternative that will be attractive to the citizenry.”

Mary Pat Clarke, Schmoke’s challenger in next year’s mayoral race, does not plan on making medicalization an issue in the election.

“It is not a local issue,” Clarke points out. “It can’t be solved locally. The real issue is the here and the now and the livability of Baltimore City. If it is an issue in the mayoral race, it will be so only because [Schmoke] makes it one.” The bottom line to Clarke is that medicalization “is not something that we can do [on a local level], it is only something that we can talk about,” and too much talk means too little action. “You can’t use these discussions as an excuse to abandon the treatment programs that exist today,” Clarke argues.

She has particular misgivings about Schmoke’s new STEP, or drug court, program, which has already enrolled more than a dozen addicts and plans to divert 600 nonviolent drug criminals to treatment in its first year. Although she supports the initiative, Clarke fears that the city’s troubled drug-treatment system is ill equipped to handle the new program.

“To talk about a drug court without a rehabilitated and refunded treatment system,” Clarke asserts, “is just to create another level of logjam, frustrations, and problems. Expanded and improved treatment is an imperative before we create a drug court and an entire new system that would fall to pieces without the backup required.”

Baltimore City State’s Attorney Stuart O. Simms, however, points out that funding for the STEP program will cover drug treatment for participants. Also, by freeing up prison space and court dockets, Simms estimates that “in one year, the cost savings of such a program will be $1.8 million.” This money can help fund an expanded treatment system.

The STEP program is modeled after the drug court in Miami, where only about one in 10 participants have been rearrested during the year following their treatment. To better the chances of the defendants’ success in beating the monkeys off their backs, the STEP program, in addition to drug treatment, provides job training, academic services, life-skills programs, job placement, and other support. It is a one-stop shop for getting your act together. All you have to do is get arrested.

Richard Farr, a cocaine addict, says people might do just that in order to get the treatment they need.

“There are a lot of people out there now who want to get into a drug program, but they can’t,” observes Farr, “so I guess you got to get caught to get into a program. It doesn’t seem right, but it sounds like that’s what you got to do.”

State’s Attorney Simms urges addicts tempted to take this route to “contact the Baltimore Substance Abuse Systems [the city’s treatment referral system] and try to see if they can get involved through the city health department. That is painstaking, that is slow, and I agree that the answer is insufficient.”

Mary Pat Clarke is more optimistic about the mayor’s AIDS Prevention Pilot Program. The $160,000 program is designed for 750 to 1,000 intravenous-drug-using participants, who will be able to exchange dirty needles for clean ones on a one-for-one basis. Another $250,000 has been dedicated for approximately 100 drug-treatment slots reserved for needle-exchange participants. Schmoke expects a needle-exchange program in Baltimore to have results similar to one in New Haven, Connecticut, where needle exchange is credited with a one-third decline in the rate of new HIV infections.

“From a public-health perspective, it is rational,” says Clarke. “Like most of us, I obviously have my concerns about the message it sends, but I think that the public-health issues are imperative. I hope that it will be successful in Baltimore City.”

Baltimore City police commissioner Tom Frazier agrees that “needle exchange is a good thing both in terms of human suffering and public-health costs.”

Clarke and Frazier are joined in support of needle exchange by many experts in the medical community. The Baltimore City Medical Society and the Medical and Chirurgical Faculty of Maryland, the city and state medical societies, respectively, are both behind the measure as a way to control the spread of AIDS without increasing drug abuse. And Dr. Michael Fingerhood, assistant professor of medicine at Johns Hopkins and medical director of the Detox Inpatient Unit at Francis Scott Key Medical Center, says, “Most of the people in primary care who take care of people with HIV without a doubt are in favor of needle exchange.”

Dr. David Vlahov, associate professor of epidemiology at the Johns Hopkins University School of Public Health, who has been studying the natural history HIV infection among about 600 HIV-infected IV-drug users in Baltimore since 1988, is a fervent supporter of needle exchange. Vlahov points out that there are 39 needle-exchange programs operating in the United States, that there have been numerous studies of needle exchange, including studies by the Centers for Disease Control and Prevention and the U.S. General Accounting Office, and that the results are favorable.

“Looking across the date from a variety of different studies,” Vlahov said as he shared the Hopkins stage with Schmoke in March, “the results have been that needle-exchange programs do not encourage people to start drug use, they do not encourage current drug users to inject more frequently, they do not encourage former users to restart drug use, and they do not encourage needle sharing. So a lot of these concerns that people have had are thwarted by the data that have come forth from these studies.”

The Governor’s Executive Advisory Council, which advises and reports to Governor Schaefer on public-policy issues, just plain disagrees. Last spring it submitted a “Presentation in Opposition to Needle and Syringe Exchange Programs” to the Governor’s Drug and Alcohol Abuse Commission, the body responsible for helping to form and implement the governor’s drug-and-alcohol-abuse policies. The report concludes that the evidence on needle exchange is shaky, and “the real risk of doing real harm is too great.”

The council argues, based on what its chairman, Marshall Meyer, calls “a lot of data, research, study, and common sense,” that need-exchange programs are not safe. The list of risks include sending the wrong message about drug use, causing increased drug use and conversion to injection drugs, assisting criminal behavior, subverting drug-treatment efforts, and increasing the likelihood of “needle stick accidents.”

The council also questions whether needle exchange will work. Focusing just on needles, the report points out, overlooks the roles that other injection paraphernalia and that unsafe sex play in transmitting HIV.

“Facilitating drug use, through the provision of needles, is not likely to result in safe sexual behavior,” the report states, so it concludes that needle exchange may exacerbate the spread of sexually transmitted HIV. Finally, the council noted “that needle exchange programs are having very limited success in reaching, and even less success in keeping, the highest risk users.”

Some representatives in Baltimore’s City Council are concerned not only about mixed messages regarding condoning drug use, but also that the needle-exchange program won’t work. Councilwoman Paula Johnson Branch, of the Second District, feels that “the concept is okay, if addicts would turn the needles in and use clean needles, but I don’t think that will happen. I don’t think addicts are responsible enough to do that.”

Councilman Nick D’Adamo, of the First District, agrees: “Needle exchange is iffy to me, because if a drug user on the corner is going to shoot up, I don’t think he’ll be looking for a clean needle. I think he is going to use whatever is there at the time.”

Tony Whiting, an IV-drug addict living in a homeless shelter run by Street Voice, an advocacy group for addicts, thinks the council members are wrong on this score.

“People will use brand-new needles if they have them,” Whiting insists. “Even the ones who don’t care want to use brand-new needles because they are easy to use, they don’t clog, and it makes the whole process a whole lot easier. Any addict would rather have a brand-new set than something used any day.”

“Not everybody will go to get a clean needle every time, but the majority of them would,” he predicts. “Maybe if there was a place where they could go to get clean needles, then a lot of [needle sharing] would be eliminated. Not all of it, but a lot of it would.”

Whether addicts will use the program is not the issue for some people; the issue is the extent to which the needle exchange amounts to legalization.

“It’s a bizarre thing to do,” Joyce Malepka says. She argues that “it’s Draconian to give someone who injects heroin needles to continue that process. We see it as a giant step toward legalization.”

Mary Pat Clarke feels that for now, Schmoke’s visions may be delusions.

“If he can help to improve and enlarge the treatment system in Baltimore City, I would support that,” Clarke says, “but the council has been looking at the current programs and is beginning to meet with [drug treatment] providers and explore the gaps. The providers are out there, underfunded and struggling to survive and handle their caseload, and it is a system in crisis. They are overloaded, they are underfunded, and the city has failed to supply an adequate system of coordination to really assist.”

At least part of the problem is the miniscule amount of funding that comes from the city itself for drug treatment: the figure hovers around $150,000 per year, or about one percent of the total drug-treatment budget for Baltimore City. Because of this meager contribution, some people believe that Schmoke is merely canting when he calls for more treatment.

“He’s been talking like this for so many years,” Michael Gimbel says, “but how much money has he put in his budget to back up his word that he really believes in treatment? Baltimore City gets millions right now from the state for drug treatment, and the city puts virtually nothing in. Yet he wants to go to Annapolis and say, ‘My top priority is needle exchange.’ Why isn’t his top priority treatment for everybody? That is hypocrisy. That is politics, so I can’t respect that.”

Politics or not, if Schmoke manages to get 10,000 new federally funded treatment slots, it will be a coup for the beleaguered Baltimore treatment community.

According to “Baltimore’s Drug Problem,” published by the Abell Foundation, which has funded or carried out many studies about local issues for the city government, “drug treatment experts in Baltimore City suggest that the number of treatment slots needs to be increased, conservatively, by three-fold.” Since there are currently 5,300 treatment slots, Schmoke’s proposal would almost meet the target.

The mayor is seeking a meeting with Clinton Administration officials to discuss his drug-treatment proposal. In the meantime, alternative funding may be found from two other federal sources: Clinton’s crime bill, if passed by Congress, will provide more money for drug treatment, and U.S. Attorney Janet Reno has created a new block-grant program that can be used for either policing or drug treatment.

“Both of those together don’t make up ten thousand [treatment slots],” Schmoke says, “but they would allow us to almost double the number of slot that we have now.”

Despite Schmoke’s optimism, the operable word when it comes to expanded federal funding for drug treatment in Baltimore City is if. And if Schmoke doesn’t produce the proposed treatment slots, then Baltimore’s addicts will continue queuing up on the treatment waiting list and continue to rob, steal, smoke, and shoot up until they can get effective treatment for their disease. According to “Baltimore’s Drug Problem,” on any given day there are about 730 addicts on the treatment waiting list, and only one out of 10 Baltimore substances abusers who want help can get it.

Since 1988, when Schmoke opened a national debate over drug decriminalization, he has done his fair share of talking about providing the help addicts need. Now he has started to take steps to do something about it. He is determined to prove that his medicine works, and if he stays in office another term, Baltimore is destined to be the testing ground.

Schmoke, casting himself as the good doctor, has donned the white lab coat and drawn up the syringe, and Baltimore, gravely ill from the combined effects of drugs, crime, and AIDS, is rolling up its sleeve to take the dose. But will the good doctor find a vein?

South Mountain Creamery, the Frederick County dairy farm and food-distribution company, is a fixture of Baltimore-area farmers markets, particularly the Waverly market on Saturdays or the one on Sundays, downtown under the Jones Falls Expressway. South Mountain co-owner Randy Sowers is now in the hot seat with the feds, because in late February, the Internal Revenue Service’s Criminal Investigations Division (IRS-CID) used a federal anti-money-laundering statute to seize the contents of a PNC bank account Sowers says was the depository of cash earned by his company’s farmers-market business.

Sowers has not been charged with a crime, and says he expects to learn soon whether or not he will be. As for getting his money back—nearly $70,000, a fraction of the nearly quarter-million dollars in cash deposits the feds say Sowers laundered between May and December last year—well, based on the experiences of others in his position, he’ll likely not see it again, at least not all of it.

Baltimore County Police officer Michael Aiosa, who has been detailed as an IRS-CID task-force member since October 2010, signed the six-page affidavit used to get the seizure warrant to empty the account, of which Sowers and his daughter-in-law, Karen Sowers, are co-signatories. The affidavit says cash deposits were broken down into increments of under $10,001 each, causing PNC to not generate required “currency transaction reports” (CTRs) that financial institutions must file with regulators when they receive or disburse more than $10,000 in a single cash transaction. Under 31 U.S.C. 5324, federal law prohibits such conduct, which is called “structuring.”

Sowers, who did not seek publicity about his predicament but spoke to a reporter after the search warrant in the court records came to City Paper’s attention, says he deposited the cash he’d made in the increments in which it had been earned. If the deposited amounts often ended up being a little under $10,001, he explained, that’s just the way it worked out and he no intention of breaking the law.

“We had no idea there was supposedly a law against it—we were just doing it the way we figured we were supposed to, making deposits every week,” Sowers explains. “We weren’t laundering money,” he adds. “We’re farmers, we struggle every day to pay bills. We don’t know what else to do. Now we just feel like putting [our cash] in a can somewhere.”

Sowers’ attorney, David Watt, says his client “probably shouldn’t have said anything” when contacted by City Paper, and declined to comment further, saying, “We don’t want to act like we’re trying to influence the goings-on” by talking with the press.

Historically, the anti-structuring statute has been used by prosecutors as an ancillary charge with other accusations of nefarious behavior, such as drug dealing or terrorism. And it still is. But over the last few years, prosecutors have started to use it more regularly as a standalone charge—an observation noted by defense attorneys that Maryland U.S. Attorney Rod Rosenstein confirms.

Syracuse University’s Transactional Records Access Clearinghouse, a data center about federal court cases, reports that in fiscal year 2011 Maryland brought 14 of the nation’s 99 structuring cases, making it the top state for such prosecutions. Nationally, the numbers have been rising; the 2011 figures are up 8.8 percent from the year before and up 57.1 percent from five years ago.

Greater prosecutorial emphasis on enforcing the anti-structuring statute has resulted in a rise in money seizures, civil-forfeiture cases, and criminal charges against small businesses and the people who own them. Typical targets handle a lot of cash, and in Maryland gas stations, liquor stores, and used-car dealerships have landed in expensive trouble, losing money through seizures, criminal penalties, and legal bills.

South Mountain is not the first seasonal-produce market to find itself targeted for structuring recently. Taylor’s Produce Stand, on the Eastern Shore, was stung last year after the feds seized about $90,000 from its bank accounts. In December, pursuant to a civil-forfeiture settlement agreement after no criminal charges were filed, the stand’s owners got back about half of the seized money.

Two members of the defense bar who handle structuring cases, Gerard Martin and Steven Levin, both former Maryland assistant U.S. attorneys, say they have noticed the anti-structuring enforcement trend emerging in Maryland over the last several years.

“The emphasis is on basically seizing money, whether it is legally or illegally earned,” Levin says. “It can lead to financial ruin for business owners, and there’s a potential for abuse here by the government, where they use it basically as a means of seizing money, and I think we’ve seen that happen.”

“South Mountain Creamery!” Martin exclaims when contacted by phone. “They’re going after South Mountain Creamery! That’s an icon. That’s like going after mom and apple pie.” Then he settles in to ruminate on the general trends, saying cases typically arise because financial institutions “are required to tell the government about it” when they suspect a pattern of structured cash deposits. Then, “the government gets a search warrant and takes every nickel out of the guy’s bank account,” Martin continues, adding that “structuring is generally an indication that there is something going wrong, but the government doesn’t always find another crime,” such as drug dealing or tax evasion.

“There are a lot of legitimate reasons why a liquor store or a gas station would be depositing $9,500 in cash a day,” Martin says. “Sometimes the numbers just work out that way. But it is usually not an accident that it is happening.”

Rosenstein says that anti-structuring efforts “are an increasing area of emphasis for the Justice Department, and there has been an influx of resources” to investigate and prosecute it. Thus, he says, “I’d be disappointed if there wasn’t an uptick” in prosecutions, given the additional resources.

Post-Sept. 11 changes to banking laws, Rosenstein continues, have prompted financial institutions to report suspicious financial doings more vigilantly, and as a result, investigators and prosecutors now have “a treasure trove of information” about transactions, which provides them with “potential leads for finding criminal activities.” Structuring is often a red flag for other crime since, Rosenstein says, “typically people who go through all those lengths” to make multiple cash deposits of just under $10,000, sometimes at multiple bank branches on the same day, are trying to hide something. But, he continues, “There’s a possibility that somebody did it innocently, and we are always open to that.”

Sowers spoke at length about being targeted for structuring. In essence, he thinks the government used an exotic legal gimmick to suck hard-earned money out of his business just as he’s facing bills for hay and other spring-time expenses farmers incur—but he admits that, if there’s a law against what he did, “well, it looks like we did break the law,” even if he didn’t mean to.

The seizure and the resulting legal limbo as he awaits the prosecutor’s charging decision has “scared us to death,” he says. And the banking headaches that resulted from an emptied account have been never-ending, including bounced checks, mucked-up automatic withdrawals, and the resulting overdraft fees.

Randy Sowers is not the only Maryland farmer recently targeted by federal money-laundering investigators for illegally depositing cash his business earns in increments of $10,000 or less, in order to avoid triggering bank-reporting requirements. But Sowers, whose South Mountain Creamery (SMC) dairy farm in Middletown, near Frederick, is a popular fixture at Baltimore-area farmers markets, is the only one to exercise his First Amendment rights and talk to the press about it.

For that, Sowers’ lawyers say, the Maryland U.S. Attorney’s Office (USAO-MD) has made him pay—an assertion that U.S. Attorney Rod Rosenstein denies, despite an e-mail sent to Sowers’ attorney by the chief of Rosenstein’s asset forfeiture and money laundering section, Stefan Cassella, that appears to state exactly that.

As City Paper reported in April, nearly $70,000 of Sowers’ money was seized by federal law enforcers from his bank account in late February (“Cashed Out,” Mobtown Beat, Apr. 18), on suspicion that he had been illegally “structuring” deposits of cash from SMC’s farmers market business. City Paper reached Sowers by phone for the article, and he granted an interview—though his attorney, David Watt, said at the time that Sowers “probably shouldn’t have said anything,” since “we don’t want to act like we’re trying to influence the goings-on” in the case.

A day after the article was published with quotes from Sowers, the USAO-MD filed a civil-forfeiture lawsuit seeking to keep Sowers’ seized funds (The News Hole, Apr. 20). According to Watt, Cassella told him over the phone that day that he filed the lawsuit because Sowers talked to the press.

In an e-mail to CP, Watt paraphrases what he recalls Cassella saying: “Well, Dave, now I have a problem. Your client spoke to the press and now I have to file charges. Otherwise it will appear that I was influenced by your client speaking to the press. Also, I don’t want the next person who I file against to think that he/she can gain leverage by talking to the press.”

Prior to the article, Watt says working to resolve the case with Cassella had been a “relatively amiable process.” Afterward, Watt continues, the prosecutor changed his tune. Rather than engaging in what Watt says Cassella had previously described to him—a back-and-forth of offers and counteroffers over the amount of seized money the government would keep—Cassella instead said Watt “misunderstood” how the process would go, and gave a hard-and-fast, nonnegotiable figure of $29,500, saying, in essence, to take it or leave it.

Once the figure was agreed to in May, the parties negotiated in e-mails about the settlement language that would be filed in court to close the case. Watt and another attorney who is advising Sowers, Paul Kamenar, provided CP with the e-mail chain, which shows both sides jockeying for language that would limit their respective liabilities.

Ultimately, the e-mails show, Cassella had no objection to including a clause in which Sowers “admits no wrongdoing.” But he was steadfast in insisting that the agreement contain the following language: “the Government had reasonable cause to seize the defendant currency and to commence the action against the defendant property.”

Initially, Cassella said these words were “routine in forfeiture actions to protect the agents” who investigated the case from personal liability. Watt countered that in another structuring forfeiture filed last fall against money seized from Taylors Produce Stand, an Eastern Shore farming business, no such language appeared in the settlement agreement.

“I have a hard time explaining to my client why he is being treated differently,” Watt wrote, “especially where your initial concern was that the government agents not be liable for any claims for the seizure,” an issue Watt contended was addressed in another section of the agreement.

Cassella, in what Watt and Kamenar say was the last communication from Cassella in the matter, responded with one sentence: “Mr. Taylor did not give an interview to the press.”

CP shared the relevant e-mails with Rosenstein, asking for comment, and he e-mailed that if Watt and Kamenar “had any objection to the terms of the settlement,” they “should have raised it to my attention” before signing it. He also asked if Sowers and his attorneys “dispute” that “Sowers admitted that he ‘intentionally’ kept his cash deposits under $10,000 to avoid throwing up red flags.”

Kamenar says, “We were squeezed for time” by the time Cassella, on the same day the agreement was signed, revealed why he was insisting on language that was not in the Taylor agreement. He adds that, despite Sowers’ admission that he knowingly avoided red flags by depositing less than $10,000 at a time, “there was no intent by Randy to violate the structuring laws.”

Cassella, for his part, wrote in an e-mail to Rosenstein, which the USAO-MD shared with CP, that “the point is that the Sowers settlement was routine, not a punishment for exercising his First Amendment rights.”

“We’re not done with this, yet,” Kamenar says, adding that “Randy does not shy away from asserting his rights, and we think there should be more done to expose this kind of abuse.” Kamenar says he intends to send a letter to Rosenstein, demanding that there be “corrective action” in which Cassella is “disciplined” for the way Sowers’ case was handled.

“This is just another example of government overreach,” Kamenar continues, “this heavy-handed forfeiture going after people like the Sowers, and then penalizing them for talking to the press.”

“I get pissed off every time I think about this,” the 53-year-old from Southeast Baltimore declares, sitting at a conference table in his lawyer’s office. “I don’t trust the cops,” he says, his glasses only slightly shielding the fury in his eyes, a thin mustache punctuating his vehemence. “Never have, after this happened, and I never will. I hate them.”

Looking at Owens, hearing his Baltimore accent stridently utter those words, it’s clear he’s simply telling it like it is. Twenty years in prison before being cleared of a murder conviction will make a man mad.

But Wendell Griffin, a 62-year-old also at the lawyer’s office meeting, is not the least bit angry. His bald pate rests smoothly above his kind face and soft eyes, a wispy gray beard on his chin. Griffin appears to be a gentle soul, and it seems perfectly natural for him to wax calmly and philosophically about his experience: “If the good Lord does things in such a way that I don’t even understand it,” he says, “then I just keep my faith and I move forward.”

The only hint at any bitterness at all comes in the very precise way Griffin describes how much time he served in prison before his murder conviction unraveled. Rather than say “more than 30 years,” it’s always “30 years, 10 months, and 23 days.

Both men, who’ve never met before, have taken the elevator 20 floors up a downtown Baltimore office building on the Wednesday afternoon before Thanksgiving to share their stories with a reporter. They come from worlds apart-Owens, a white man, comes from a section of the city that may as well be part of nearby Dundalk, while Griffin, who’s black, hails from West Baltimore-but what they share puts them in rare company: They both succeeded in showing they were unlawfully convicted of murder.

Along with a handful of others in the modern annals of Maryland murder – including Kirk Bloodsworth, the first American exonerated from death row thanks to DNA testing, and Michael Austin, who served 27 years in prison for a murder he didn’t commit – their experiences show how tragically flawed the justice system can be.

The only available surrogate for mending the damage done in such circumstances is money. The State of Maryland, for instance, gave Bloodsworth $300,000 after Gov. William Donald Schaefer pardoned him in 1993. Austin, who was pardoned by Gov. Robert Ehrlich in 2003, was awarded $1.7 million from the state for his wrongful imprisonment.

Owens and Griffin, though, have gotten neither gubernatorial pardons nor compensation from the state. So both have sued, claiming that the same findings that freed them in criminal court-that the state committed Brady violations, so named after the 1963 Supreme Court case Brady v. Maryland, which established defendants’ right to obtain state’s evidence that may help prove their innocence or be used to impeach state witnesses-should count in civil proceedings that seek to mitigate the damage they suffered from decades in prison.

While the lawsuits Owens and Griffin have brought are notable for the intrinsic value of the lessons they hold for proper police and prosecutorial work, they also jump for attention because of who got sued. Among the defendants in their cases are some of Baltimore’s most famous cops: detectives profiled in David Simon’s 1991 book, Homicide: A Year on the Killing Streets, which chronicled the Baltimore Police Department homicide division’s work solving murders in 1988.

Owens and Griffin say they’ve never read Homicide, but while they were in prison, it catapulted quickly to the pinnacles of the true-crime genre and, starting in 1993, to the airwaves, in a television-series adaptation by NBC called Homicide: Life on the Street. The success of both meant that some real-life detectives became big names far beyond the Baltimore criminal justice circles to which most celebrated local officers’ fame is confined.

Owens’ lawsuit takes aim at Jay Landsman, Thomas Pellegrini, and Gary Dunnigan, three of the detectives whose work was described in Homicide. Two of them inspired characters in the television show: Landsman was the basis for Det. John Munch, played by Richard Belzer, while Pellegrini inspired Det. Tim Bayliss, portrayed by Kyle Secor.

Also named as a defendant is former Assistant State’s Attorney Marvin Sam Brave, who Owens claims conspired with the detectives, at times, to coerce state witnesses to lie and withhold Brady material.

Griffin’s case, meanwhile, targets Jerry Landsman – Jay Landsman’s brother, who was not in the book – and two detectives who were featured in Homicide, Donald Kincaid and Edward Brown. In the television show, Kincaid became Det. Beau Felton, played by Daniel Baldwin. Griffin claims the three committed Brady violations by withholding from the prosecutor-and, by extension, from him-numerous witness statements that contradicted testimony that led to his conviction at trial.

Attempts to reach the defendants in both cases were unsuccessful, and their lawyer, Daniel Beck of the Baltimore City Law Department, did not respond to a request for comment. But Simon, reached by email, wrote: “If they withheld Brady material, that’s dead wrong. If evidence now clears men who were innocent and were imprisoned, that is tragic and grievous. And if the real killers went undiscovered, then the injustice is compounded.”

Still, based on the time he spent with them in 1988, Simon writes that “I had an overall sense that it was hard enough for Baltimore detectives to obtain guilty verdicts on cases in which evidence was substantive or even, at times, definitive.” He calls the detectives whose work he watched that year “professional,” and characterizes the “oversight of their cases” by the state’s attorney’s office as “conscientious and appropriately cautious.”

But “if the allegations hold” in the cases brought by Owens and Griffin, he adds, they “do not reflect that dynamic,” and “I’ll certainly be interested to follow the civil cases and see both the allegations of the plaintiffs and the counter arguments of the defendants fully explored.”

The first chapter of Homicide opens with Jay Landsman and Pellegrini cracking wise about a small bullet hole in a dead man’s head.

“Here’s your problem,” says Landsman, having turned the man’s head to reveal the wound. “He’s got a slow leak.”

“You can fix those,” Pellegrini responds.

“Sure you can,” Landsman says. “They got these home repair kits now. . . . Just like with tires. Comes with a patch and everything else you need. Now a bigger wound, like from a .38, you’re gonna have to get a new head. This one you could fix.”

This kind of gallows humor is an engaging aspect of Homicide, but it is not what set the book apart from the pack. That was accomplished by its nuanced descriptions of the detectives themselves and the way they worked, revealing them to be more complex than the stereotypical gumshoe who relies on keen intuition, incisive intellect, and by-the-books protocol to take killers off the streets. While the crime-solving dynamics described in Homicide include those noble elements, it also portrayed the detectives as flawed, sometimes willing to play dirty, since cutting corners or deploying deceptive tactics-always with an eye on maintaining plausible deniability-can help keep the guilty from escaping charges and boost the division’s clearance rate with arrests for open murders.

In Homicide, Simon writes that “with rare exception, a confession is compelled, provoked and manipulated from a suspect by a detective who has been trained in a genuinely deceitful art.” A detective “follows the requirements of the law to the letter-or close enough so as not to jeopardize his case. Just as carefully, he ignores the law’s spirit and intent.” And all of this lying and mind-twisting is “street legal. Reasonable deception the courts call it. After all, what could be more reasonable than deceiving someone who has taken a human life and is now lying about it?”

And so, the detectives solved cases, taking them from red to black on the big board in the office. Even without Homicide, though, the Baltimore murder cops of the 1980s were legendary. They linked killings to perpetrators at a prodigious clip, despite a street culture in which fewer and fewer people were willing to help cops catch criminals. Their average annual homicide clearance rate-the percentage of murders closed by arrests-was 76 percent that decade. That was more than the 72-percent national average at the time, and much better than now. In 2012, the clearance rate was 47 percent, far below the national rate of 62.5 percent.

But thanks to Homicide, what it took for detectives to keep up the clearance rate is well-examined – and now, with the convictions of Owens and Griffin exposed as bogus, the risks inherent in the detectives’ sometimes fast-and-loose methods have become manifest. Though rarely realized, they are large.

The best outcome is that evidentiary and investigative problems in a murder probe come to light after suspects are arrested but before they are indicted. As Simon wrote this summer in his blog, the Audacity of Despair, 22 of Baltimore’s 234 homicides in 1988-nearly 10 percent of them-“were cleared by the police department through arrest, but then later dropped by the state’s attorney’s office prior to indictment.”

Much worse is when the bad outcomes come to light years down the road, with reversals of illegally obtained murder convictions, meaning that either an innocent’s liberty is wrongfully taken while the murderer remains free, or the murderer, with the remaining evidence too slim for prosecutors to retry the case, walks out of prison early with a clean slate. When such reversals happen, they shake confidence in the system and raise suspicions that even worse outcomes are lurking out there somewhere-innocent people rotting in prison, unable to prove how their cases were fixed, while the true murderers get away with it.

Thus, the banter between Landsman and Pellegrini on Homicide‘s opening page provides a metaphor: a bad murder conviction can lose air over time, but there’s no easy home-repair kit to fix that flat. So right now in federal court, Owens and Griffin, who blew holes in their murder cases big enough to set them free after decades in prison, want to make Homicide detectives pay. Whether they’re successful remains to be seen, but the process they’ve set in motion assures that the detectives’ risky pursuit of justice airs lessons for cops, prosecutors, defense attorneys, defendants, and the public at large-since, though the chances are slim, anyone can end up on the wrong end of a wrongful prosecution.

“What has been happening to me, it’s sad,” Griffin says during the lawyer’s office meeting. For a man who was in prison for three decades of a life sentence until last year, when a judge signaled the Brady violations in his murder conviction would lead her to grant him a new trial, that’s an understatement.

Griffin likens the cops who pinned him for the 1981 murder of James William “Lucky” Wise, who died of two shots from a hunting rifle in Cherry Hill, to bullies.

“Seem like the bully kind of get his way for a little while,” he says. “And after a while, somebody, he comes through a brick wall and check the bully. And that’s what we’re doing right now,” referring to his federal civil rights lawsuit, which his attorney Charles Curlett filed on his behalf in November. “We’re checking the bully.”

In 2011, Griffin had sought DNA evidence to test, which he hoped would exonerate him, but none was available. Instead, his legal pursuit-spearheaded by the same veteran attorney at the Maryland Public Defender’s Office, Stephen Mercer, who did the work to win Owens’ motion for a new trial-turned up numerous witness statements in the homicide file of his case that should have been provided to his defense at trial, since Griffin could have used them to undermine the state’s theory of the case.

“The internal police records produced for the first time in 2011,” Griffin’s lawsuit states, “reveal that shortly after Mr. Wise was murdered on April 22, 1981, the police showed photo-arrays containing Mr. Griffin’s picture to two key witnesses,” and both “failed to identify Mr. Griffin.”

One of them, Annie Wyche, had told police she would recognize the shooter, since she’d come within 10 feet of him, and she provided a description of him, including the fact that he was carrying a gun that looked like a shotgun pointed down along his leg. But when presented a photo array, she pointed to a photo a Griffin and said, “it looks just like him, but it’s not him.” In a second photo array, with a more recent photo of Griffin, she still did not pick him out.

Wyche did not testify at the trial, but the other key witness that failed to pick Griffin out of a photo array-Mark Williams-did.

Williams had “stumbled upon the crime scene immediately after the shooting and saw a person from 10 feet away dragging the body of Mr. Wise,” the lawsuit states. The trial transcript has Williams telling the jury that “I saw a guy dragging another guy,” and was told to “go the opposite way” because “I didn’t want to see what was over there.” So Williams ran to a friend’s house and made sure the police were called. Asked whether he could see the man’s face who was dragging the body, Williams said, “not really. But I saw a shadow. I could describe the things which he was wearing”-“black-framed glasses with clear lenses” and “a black jacket and a pair of blue jeans.”

Griffin’s trial attorney, Rolf Quisgard, did not cross-examine Williams. But surely, if he’d known Williams could not pick Griffin out of a photo array shortly after the murder, he would have.

Griffin’s lawsuit asserts that the detectives suppressed the Wyche and Williams statements excluding Griffin as the shooter “precisely because” they “directly contradicted the police theory” that Griffin murdered Wise. What’s more, in a search warrant affidavit supporting the arrest of Griffin and the search of his home, Kincaid used Wyche’s physical description of Griffin-without mentioning that she’d twice failed to pick him out of a photo array.

The detectives on the case, the lawsuit continues, also suppressed other witness statements indicating that someone else may have murdered Wise and that conflicted with another key element of the state’s theory of the case-that Griffin was observed before and after Wise’s killing with a gun.

Faced with all of this, Baltimore City Circuit Court Judge Gail Raisin in May 2012, “having indicated to the parties that she was prepared to order a new trial” in Griffin’s case, the lawsuit explains, “granted an unopposed motion by the defense to modify Mr. Griffin’s sentence to time served. After more than 30 years, Mr. Griffin was freed from custody.”

Unlike Owens, though, Griffin’s murder conviction is still on the books. That’s because he decided to take a plea deal rather than wait for a new trial and sit in prison for another year or more before prosecutors dropped the case against him.

“Mr. Mercer had told me,” Griffin recalls, “‘Wendell, the judge going to grant you a new trial, but it’s going to be 18 months, as opposed to you getting out right now. It’s your choice. What do you want to do?’ And I think I’ve been out 18 months today.” He points out that, when he got out, he immediately realized that “I need to make myself marketable, and I need to get it pretty fast, before age is going to catch up with me and I ain’t going to be able to do too much.” So he got his commercial driver’s license, worked as a cross-country truck driver, and now drives a delivery van for a local construction company-all things he couldn’t have done if he’d waited in prison for a new trial.

While Griffin’s federal civil rights suit is newly filed, so the defendants have yet to respond, his attorney, Curlett, anticipates an atypical issue will be raised in the case: Since Griffin’s conviction formally stands, did he receive what’s called a “favorable termination,” allowing him to sue for damages?

“Wendell’s situation is unusual,” Curlett says, so “I fully expect that that is one of the issues that we’ll confront immediately.” Another attorney at the meeting, Laura Abelson, adds that calling Wendell’s outcome “anything other than an actual exoneration would be patently unfair.”

Despite the injustice he’s suffered, Griffin’s faith in the criminal justice system remains intact. “We have a good system,” he says, adding that “it leads up to a certain point where we can actually prosecute somebody for a wrong that they did.” But “in my case, in his case,” he says, nodding towards Owens, “it wasn’t done. They didn’t follow the process, the procedures. They violated those. And when you violate that, you destroy people’s lives.”

In 2011, asGriffin was just learning about all the undisclosed witness statements in his case, Owens filed a federal civil rights lawsuit claiming that the detectives and the prosecutor on his case coerced witnesses to perjure themselves at his trial, thereby knowingly putting on false testimony, and committed a host of Brady violations. In 2012, Owens’ case was dismissed.

U.S. District Judge George Russell, ruling from the bench at the conclusion of a motions hearing, said that Owens filed the suit too late, that he cannot sue the Baltimore City State’s Attorney’s Office, that the detectives did not have a Brady obligation at the time Owens was investigated and prosecuted, and that the facts Owens alleges don’t amount to civil rights violations. Now the case is on appeal, set for oral arguments in January before the 4th Circuit Court of Appeals in Richmond, with Curlett, Abelson, and another Baltimore attorney, Joshua Treem, forming the appellate team.

While the outcome of Owens’ lawsuit can’t be predicted, the facts of his flawed conviction are well-established.

Though no scientific evidence linked Owens to Colleen Williar’s brutal murder, in which she was beaten, stabbed, and strangled, a jury convicted him after trial testimony included a jailhouse snitch, Larry Oliver, who said Owens had discussed the crime with him, and the confession of James Thompson, who implicated Owens and was also found guilty of the crime in a separate, subsequent trial. Owens received life with no chance of parole-the first person to receive such a sentence under a then-new Maryland law.

In October 2008, after DNA testing of evidence cleared him, Owens was exonerated and freed. The DNA evidence also excluded Thompson, who was granted a new trial but was freed in July 2010 after receiving time served upon pleading no contest in the case.

What also came to light, as Owens’ appellate brief states, is that “the police and [Assistant State’s Attorney] Brave had withheld exculpatory evidence that showed definitively that” Thompson and Oliver “lied on the stand-repeatedly-during Mr. Owens’ trial, and the police and Mr. Brave had not only allowed this perjured testimony, but manufactured and induced it.”

Thompson, the brief continues, had told Landsman, Pellegrini, and Dunnigan “no fewer than seven different and materially conflicting versions of the events that supposedly surrounded Ms. Williar’s death.” Finally, mid-trial, “when Mr. Brave realized he was losing his case,” Brave told the detectives to try again with Thompson, and he finally gave them a version that “matched the physical evidence at the scene.” Yet, “none of these conflicted statements were disclosed” to Owens, so he could not “effectively cross examine” Thompson and show the jury how his story had changed again and again.

Oliver, meanwhile, testified after Brave had communicated with him over and over again about being rewarded in his own criminal matter in return for implicating Owens-yet at trial, Brave “knowingly elicited false testimony” from Oliver that “he had received nothing in return for his testimony,” the brief explains, telling the jury he did so only because “it was the right thing to do.” The defense knew nothing about the numerous interactions between Brave and Oliver about possible leniency because Brave did not disclose them, as required, and thus Owens’ trial counsel could not use them to discredit Oliver before the jury.

Beck, the defendants’ attorney, in his appellate brief argues that Landsman, Pellegrini, and Dunnigan acted at the time without any sufficient court decision that would put them “on notice that they were violating Mr. Owens’ constitutional rights by failing to disclose allegedly exculptatory/impeachment evidence to him,” saying “such a duty, at best, was with Mr. Brave.” He adds that Owens “has failed to identify other instances of similar misconduct” that would form “a plausible factual basis of a widespread practice of the particular unconstitutional method at issue.”

Legal wrangling aside, Owens wants his case to come back from Richmond and get a full airing in a Baltimore courtroom. “I’m not doing no settlement,” he says, “I want everything I’m after.” It’s the same absolutist gusto he demonstrated when prosecutors dangled a plea before him after he won his motion for a new trial. “I wasn’t pleading guilty to nothing,” he recalls, adding, “I told Mercer, when I went in and got that new trial, I said, ‘Look, we’re going all the way with this. I’m not going in there to plead guilty to anything.”

In a larger sense, though, whether or not Owens and Griffin are awarded millions of dollars by civil juries is beside the point. Money talks, of course, persuading police departments and prosecutors offices to train and oversee their staffs to avoid law-breaking when making cases. But so does public discussion of these issues-and lawsuits such as the ones brought by Owens and Griffin prompt that.

“Both of the cases demonstrate the extreme negative consequences of cutting corners and not following the rules,” explains Abelson. “I think Wendell has a good point, that we do have a good system. But the system requires that the parties in the system buy into it. And if you can’t trust that the system is really working, then you have innocent people who are convicted and spend large portions of their lives behind bars for crimes they didn’t commit. And these cases demonstrate how that happens.”

Clarification: Neither of the murders for which James Owens and Wendell Griffin were wrongfully convicted occurred in 1988, and thus neither were mentioned, much less covered, in Homicide.

David Schmidt is president of a marine-supply company in Hanover, Pa., who keeps a boat in a slip at Canton Cove Marina, where Linwood Avenue ends at the harbor. As he approaches the marina gate and gangway on Sept. 12, he notices me and another paddler holding back gags as we nose our kayaks toward the storm water that empties into the harbor beneath the waterfront promenade in front of two condominium buildings there. Schmidt sees us look down at the gray-colored water we’re floating in, into the darkness of the tunnels where it’s coming from, and then back down at the water.

“It’s raw sewage coming out of the storm drain,” Schmidt says flatly as he walks along the dock. “I’m down here all the time for the last five years, and it’s been going like that the whole time. It’s not always this bad, but it’s always bad. God forbid anybody fall in. You should see it when it rains.”

There’s been no rain to speak of for weeks, and yet here is enough sewage to turn the water at the marina a striking shade of gray and to thoroughly stink up the surrounding blocks. It’s entering the harbor out of a drain outlet, or “outfall,” that’s designed to funnel runoff from city streets and pavements when it rains, not the waste water that the city’s sewage system funnels to its water treatment plants. If there had been a good, hard rain, then one might expect some sewage in the storm drain; the sewer pipes running down streambeds tend to get hit by large objects in storms, sometimes getting blown open and causing nasty messes downstream. But there had been no storm. There had to be some other explanation.

Schmidt keeps talking. He’s indignant but resigned, complaining that he pumps out his boat sewage so it won’t get in the Chesapeake Bay, as the law says he must, and the city should, too. But apparently, he concludes, the city would rather keep paying fines than obey the law.

Schmidt has many ways to complain about the odor, perhaps because that’s the main topic of the conversations he has with others who rent slips here. “I got my boat sealed up so I can go down below and get away from it,” Schmidt says, and points to other boats similarly protected. “But you never really can. That restaurant”–he points at the nearby Bay Café–“keeps its patio awnings zipped up on this side because of it. That pool next to it [at Tindeco Wharf] is hardly used, most of the time. Look at all those condo windows,” he says, gesturing at the Canton Cove building. “Nice weather, but they’re closed up tight. Same thing. It’s the smell.”

Schmidt walks onto his boat and goes below, and we glide away in our kayaks, marveling that fish are jumping just 50 yards away from the foul outfall. What’s more, a quarter-mile away, at the bulkhead of the Korean War Memorial Park, men are fishing for those fish.

The Linwood Avenue outfall has been polluting the harbor with sewage, on and off, for a long time. Schmidt’s account confirms what I’ve occasionally observed firsthand while kayaking or walking by here since the late 1990s. The federal Clean Water Act calls for all U.S. waters to be returned to swimmable and fishable conditions, and while fish sometimes jump near here, swimming, while never advisable, would at times be suicidal. So the next day, I call the U.S. Environmental Protection Agency and Department of Justice, which enforce the Clean Water Act, to find out whether or not the sewage coming into the harbor from under Linwood Avenue is somehow allowed. After a couple of short back-and-forths about what was observed, it quickly becomes clear that it is not.

“We’d be very interested in investigating,” adds Angela McFadden, a high-ranking pollution enforcement officer at the EPA, in a Sept. 24 phone conversation, “because I am not aware of any continuous discharges of untreated sewage going on.”

The EPA and the DOJ are the plaintiffs, along with the Maryland Department of the Environment (MDE), in a Clean Water Act lawsuit in U.S. District Court filed against the city of Baltimore a decade ago over its illegally leaky sewer system. Five years ago, a “consent decree” was entered in the matter. Under the decree, the city must spend almost a billion dollars over 14 years, starting in late 2002, to get its sewer system into compliance with the federal Clean Water Act. So far, with less than a decade to go, the city has spent nearly $260 million and has repeatedly raised water-and-sewer rates to pay for it.

A few weeks pass of phone tag punctuated by short conversations with the EPA and DOJ, and as September turns to October, I file a request to look at the EPA’s consent-decree records and periodically return to the Linwood Avenue outfall. The scent of sewage becomes less intense over time, but it still has that unmistakable reek, especially right after it first starts to rain and whatever’s pooled up in the pipes during the dry weather gets flushed out.

Meanwhile, the city’s 311 system for logging citizen complaints and service requests steadily registers calls from along Linwood Avenue as it heads north from the waterfront into the city. The 311 system is alerted seven times about sewer odors along the Linwood corridor during September, and another nine times for the 12 months prior to that. Some of the calls are quite specific about the source, describing “a strong sewer smell coming from the storm drain in the street,” for instance, or “a very strong sewer odor coming from the inlet.” On Election Day, Sept. 11, the day before Schmidt talks to us in our kayaks, someone reports that it “smells like sewage inside and out” of a house on Linwood, two blocks north of the outfall.

Citywide, 31 other complaint calls came in to 311 operators in September about sewer odors. “There is a strong sewer odor in the area,” the city is notified by a caller from the Northwest Community Action neighborhood, on the west side near Walbrook Junction. Another caller points out that there is a “strong odor of sewage in the air” at East North Avenue and Broadway, near the Great Blacks in Wax Museum. A “bad sewer smell” is reported at Gay and Lombard streets, a block off the harbor downtown, and a “very powerful sewer smell” is noted in Waverly. “A very strong sewage smell is coming from the pond” in the woods behind Uplands, another caller notes, giving the location where Maiden Choice Run begins its rough-and-tumble journey through Southwest Baltimore before it reaches the Gwynns Falls just above Carroll Park. The list goes on.

Aside from the sewage stench rising from below the streets, the 311 system also logged a myriad of complaints that sewage was flowing in city streets, sidewalks, alleys, and into storm drains in September, which was an extremely dry month with less than half an inch of rain. As the weeks passed, the city responded to a total of 19 calls described as reporting “sewer overflows” and “sewer leaks,” and numerous other calls that described sewage flowing in the streets. When sewage runs on the streets, it enters storm drains and, ultimately, enters the Chesapeake Bay. How to estimate that flow–especially at a storm-drain outlet like the one at Linwood Avenue, which is designed to be partially submerged in the Patapsco River’s tides–is anybody’s guess.

The consent decree requires the city of Baltimore to estimate the amount of sewage released in leaks the city deems reportable, so if anyone’s trying to guess how much Baltimore City sewage is leaking, it’s the city’s Department of Public Works. It looks like DPW is lowballing it.

Whenever an “unauthorized discharge of wastewater” from the city’s sewage collection system into “any waters” of the United States, the consent decree dictates that a written report must be provided to EPA within five days. In the report, the city must describe the cause, duration, and volume of the flow, as well as “corrective actions or plans to eliminate future discharges” at the site and “whether or not the overflow has caused, or contributed to, an adverse impact on water quality in the receiving water body.”

Once DPW estimates the amount of sewage that leaked and reports it, the city is subject to fines based on the number of gallons of sewage that the city says leaked. Since January 2003, EPA records reflect the city has been levied fines totaling $416,200 (the payments are split evenly between EPA and MDE) for 255 reported leaks.

The sewer-leak reporting also forms part of the quarterly reports that the city must prepare and submit under the consent decree, to keep all the plaintiffs up to date on progress in improving the sewer system’s performance. The tally of reported leaks listed in the quarterly reports since December 2002 is 419, releasing a total estimate of nearly 190 million gallons. The smallest reported leak was 12 gallons lost to Western Run, which joins the Jones Falls near Mount Washington, on a rainy day in April 2004. The largest was the July 2004 bulkhead failure at Braddish Avenue behind St. Peter’s Cemetery in West Baltimore, which released a rush of sewage into the Gwynns Falls initially estimated to be 36.25 million gallons, though online MDE records put the guess at 1.5 million gallons.

The trend on paper has been fewer leaks reported as the consent decree progresses, with 143 reported for 2003 and 72 reported for 2006. By the end of June this year, summary details on 31 leaks were included in the quarterly reports, so 2007 appears headed for an even lower total.

As of Nov. 7, when I went to Philadelphia to review EPA’s consent-decree files, the city of Baltimore had not notified the agency of any reportable sewer leaks occurring in September 2007. There were some reported in August and some in October, but none in September. Thus, whatever spewed raw sewage out into the harbor at the end of Linwood Avenue in September, and whatever prompted citizens citywide to lodge complaints about sewer leaks, overflows, and odors over the course of that very dry month, it wasn’t sewer leaks reported by the city under the consent decree. It must have been something else.

Oddly, the 311-calling public appears to be more attuned to sewage leaking in Baltimore City when the leaks aren’t reported under the consent decree than when they are. A year before, in September 2006, when at 7.5 inches there was nearly twice the historic average rainfall for that month, the situation was reversed. The city reported five sewer discharges totaling 39,255 gallons, occurring in Waltherson, Grove Park, Cherry Hill, Violetville, and the state’s Juvenile Justice Center on Gay Street downtown. But on 311, not a single call about a sewer leak or overflow came in all month long.

“The consent decree requires the City to report releases from the collection system that reach receiving waters or storm sewers,” EPA spokesman David Sternberg writes to City Paper in a Dec. 7 e-mail. “It does not require the City to report releases that don’t meet these criteria (i.e., basement backups).”

Perhaps September’s citywide sewage funk that had residents reaching for their phones–and sewage contaminating the marina where Schmidt keeps his boat–was due to something as routine and hard to stop as a whole lot of basement backups occurring during what amounted to a drought. And perhaps the absence of 311 sewer-leak complaints in September 2006, when heavy rains prompted the city to report one big leak and grease clogs caused four smaller ones to be reported, is attributable to the fact that the leaks the city detected were in areas where residents didn’t see or smell them.

But one thing is clear, based on the September flow out of the Linwood Avenue outfall: Sewage from Baltimore City is getting into the storm drains and, thus, into the bay–a lot more sewage than the amounts being reported by the city under the consent decree.

“The harbor is being polluted with sewer overflows, especially at Linwood Avenue,” Phil Lee explains. As a founder of the Baltimore Harbor Watershed Association and an engineer, he’s being asked to comment about the Linwood outfall and its impact, and he says he’s spoken with environmental authorities about it over the years. At some point, he says, he was told that an “illicit connection into the storm-drain system upstream” was contributing to the problem. “I don’t think they’ve fixed it,” he observes, adding that “it’s still like Old Faithful.”

Lee’s not the only one who’s been keeping track of the Linwood Avenue outfall. A man whom Lee calls “a one-man army” in the cause of tracking sewer problems, Guy Hollyday, has been telling authorities about it for years.

Hollyday’s group, the Baltimore Sanitary Sewer Oversight Coalition, targeted the Linwood Avenue outfall as an “acute” sewer problem–one of three it had identified citywide–during a meeting held for city officials at Loyola College in November 2005. The group, formed in 2000 when four Baltimore watershed groups combined and coordinated their ongoing efforts to keep sewage out of city streams, issued its annual report for 2006 in May this year, updating the situation.

The report pinpointed an illegal sewer connection to the storm-drain system at the site of Pompeian Inc., an olive oil bottling company located on Pulaski Highway in East Baltimore, about two miles away from the outfall as the crow flies. It’s not clear whether the illegal connection has anything to do with Pompeian or if it just happens to meet the storm drains under the company’s property; attempts to contact Pompeian for comment were unsuccessful. Based on information from the city, however, the group’s summary explained that 300 feet of sewer pipe upstream had been lined to try to keep the sewage from entering the storm-drain system there, but as of September 2005, with sewage still entering the storm drain, the city had resolved to replace the next section of sewer downstream, too.

“It’s still not fixed, as far as I know,” Hollyday says over lunch at nearby Kiss Café in late November.

He’s right. In a Dec. 10 e-mail, DPW spokesman Kurt Kocher identifies the illegal connection at the olive oil company’s property, and explains that “the city is awaiting this company’s final plan for plant expansion,” which “will include a new proposal for the relocation of the sewer line” that’s been causing problems. “The city has continued to keep [MDE] informed on the status of this project,” Kocher adds, though apparently EPA has not been in the loop. Nothing about it appeared in the voluminous EPA files reviewed by City Paper, and the EPA’s Angela McFadden had not heard of the sewage appearing at the Linwood Avenue outfall, much less where it might be coming from.

In all likelihood, sewage will from time to time continue to contaminate the harbor at the Linwood Avenue storm-water outfall. Citizens, whose rising water and sewer rates are paying for the billion-dollar sewer-system overhaul, will endure the fouled water and reeking air until the sewer is fixed at Pompeian Inc. If the sewage still flows then, the city likely will seek out and fix other sources of sewage in the storm drains as more years pass. Perhaps it will turn out to be an never-ending battle, and there always will be sewage flowing into the harbor beneath Linwood Avenue, for as long as people flush toilets and have basement backups in Baltimore.

But none of that changes the course of progress. DPW is deeply proud of its work so far under the consent decree, and is bound to stay that way. “As of this date,” Kocher wrote in his Dec. 10 e-mail, “all but 5 of [39] construction projects [required under the consent decree] have been completed and 54 engineered [sewage] overflow structures have been eliminated.” Up next are sewershed studies and sewer flow monitoring across the city, he continued, which aim to root out the sources of unpermitted sewage discharges. “The current estimate of the program at $900 million,” Kocher concluded, “continues to be a reasonable estimate at this time,” adding that once the upcoming studies are completed “the City will be able to better refine that estimate.”

Because of the progress that has already been made, and because of more progress that’s required before the consent decree expires, Lee believes in swimmable, fishable harbor water by 2020–that’s what the law has set out to do. His optimism is commendable and was likely shared widely in 1972, when the original Clean Water Act first passed, calling for swimmable, fishable waters by 1983. But 2020’s a long time away, and hundreds of millions of dollars still has to be spent in a little less than a decade on sewer improvements. Lee seems truly to believe it’s doable, and he sees the sewage flowing beneath Linwood Avenue, while a longstanding condition, as a temporary one requiring patience before the city finally puts an end to it.

When it comes to water-quality issues, Darin Crew has to be nearly as adept at understanding sewersheds as he is at understanding watersheds. He came to Baltimore to take a job at the Herring Run Watershed Association, aiming to improve water quality in the Northeast Baltimore watershed, which is a tributary to Back River in Baltimore County. That was 2003, and in February of that year, the Herring Run hosted what was immediately billed as one of the worst sewage spills in city history. An estimated 36 million gallons of sewage was released after two massive sewer lines embedded in the stream became blocked.

Four months later, in June 2003, an estimated 35 million gallons of sewage leaked out of a damaged manhole along Herring Run, poking a hole in the largest-in-city-history theory about the first one. The following May and July brought two more 30 million gallon-plus gushers at Braddish Avenue, affecting the Gwynns Falls. For Crew, knowing about the weak links in the sewer system in Herring Run’s drainage area was to be a major part of his new job.

“It’s right down here, directly beneath this bridge,” Crew says as he pulls up in his pickup truck. The Mannasota Avenue bridge spans Herring Run, connecting the Belair-Edison and Parkside neighborhoods, and Crew promises to show me and a City Paperphotographer that sewage is running out of the storm drain constructed in the bridge foundation. We follow Crew as he scrambles down the stream bank and goes under the bridge. Concrete was used to channel Herring Run as it passes beneath the bridge, and the clear water coming out of the storm drain splashes on it and runs, pooling here and there, into the clear running stream. There’s no odor of sewage.

“It doesn’t always smell,” Crew explains. “You can tell that sewage is a likely component of what’s coming out of here by the gray scum that collects on the surfaces wherever the water is for any period of time. It’s just gray scum. Other than that, you can measure ammonia in the water. That’s a pretty good indicator. And the ammonia levels are always pretty high here. This flows about a gallon a minute, and that works out to be 60 gallons an hour–you do the math. It’s a constant flow, except when it rains. And this low-level kind of thing, by itself, doesn’t really do much damage, water quality-wise, given all that’s already getting into the stream. But it’s still a problem.”

“What about that one over there?” the photographer asks, pointing across Herring Run to another outfall coming out of the opposite stream bank. “I don’t know, let’s go see,” Crew suggests. Again, the water is clear. But this time the sewage odor hits while approaching the opening. “Whoa, that’s definitely sewage,” Crew says of the smell. But there’s no telltale gray scum. Turns out, there’s another outfall beneath the one the photographer spotted, and down there–it takes some effort and contortions to see it–there’s plenty of gray scum forming as the clear storm-drain water courses out of the pipe and into Herring Run.

“Taken all together,” Crew concludes, “these types of small, steady sewage leaks do become a serious water-quality problem. It’s not as serious as the 30 million gallons that came down here a few years ago, but it’s a problem, and I think it’s about time we kicked up the enforcement effort on this kind of thing.” He shows us one more example, under a bridge on Hillen Road next to the Mount Pleasant Golf Course, and gets back to work.

On Nov. 30, the photographer and I go to the 4500 block of Fairfax Road in West Baltimore’s Windsor Hills, looking for a plumber. A&A Plumbing is listed at an address on this block, and, since no one from the business had returned a phone message, we came to knock on the door. Once there, we found three men in baseball caps standing beside three pickup trucks, backed up toward the entrance. They know nothing of the plumber listed at that address.

“What, are you bondsmen?” one asks, and everyone laughs.

I explain that we’re almost as unwelcome, under most circumstances: the press. But when it becomes clear that the story has to do with the city’s efforts to fix its chronically leaky sewer system, and that this area has a particularly rough history of sewer problems, and that a plumber’s anecdotes of Windsor Hills sewage nightmares was sought, the three men grow friendly and relaxed. One, a 40-year-old truck driver from Randallstown who introduces himself as Rick Edwards, steps up and starts talking.

“I keep my boat down at the harbor,” Edwards explains, “at Canton Cove Marina at the end of Linwood Avenue. Been keeping it there like four or five years, and there’s sewage coming out of the storm drain there, stinking things up so bad I hardly even use my boat anymore. Can’t even go sit on your boat down there, can’t entertain or have friends down, because it smells so bad.” The infamous outfall’s reputation apparently remains intact all the way across town in Windsor Hills.

We take leave of the men to check out the sewer-main stacks protruding up from the streambed next to the Windsor Hills Conservation Trail, at the end of the block. We return a half-hour later to announce there’s no sewer odor, but the water coming out of the storm drain shows evidence of the likely presence of sewage: gray scum on the rocks and concrete where the water runs.

“The boats down at the marina,” Edwards says, “you have to clean gray scum off of the bottom of them, just like the stuff you see on them rocks. It’s the same stuff. I’ve had it scrubbed and cleaned off, and it looks like it grows off the bottom of the boat, literally. It’s just this muck.

“There’s sewage coming out all over. But what’re you gonna do? I talked to a city worker about it, he said the pipes are so old, it’s just always going to leak, and they’ll just keep on trying to catch up with them all. The leaks up here, on this street, they don’t go to Linwood Avenue, but it all ends up in the same place eventually.”

Edwards is standing seven miles away, in a straight line, from the Linwood Avenue outfall. Sewage that leaks here travels downhill to the end of Fairfax Road, where it drains downstream into the Gwynns Falls and, having joined up with more sewage-laden water as it goes, reaches the Middle Branch of the Patapsco River right near the BRESCO waste incinerator. From there, it joins the Patapsco’s North Branch–better known as the Baltimore harbor–at Fort McHenry. Right across the harbor from Fort McHenry is the Canton Cove Marina, where Edwards wishes he no longer kept his boat, and where David Schmidt complained in full three-part harmony that September day to two kayakers about the powerful dose of sewage coming out of the Linwood Avenue outfall. Everything, as they say, is connected.

“It’s gotten to the point where I don’t even want to be on the bay at all,” Edwards says of what the sewage, and pollution in general, is doing to his boating habits. “At this point, I think I’d rather be in Ocean City, any day.”

We say goodbye and drive up the hill from Fairfax Road onto Talbot Street, pulling over to speak with a gentleman raking leaves on the curb. “Sure, I know about the sewer problems over the years,” he says. “They did a lot of work trying to fix them in the ’70s and ’80s, and they did more in the ’90s. Used to hear the heavy machinery down in the Gwynns Falls, and now they’re doing more under the streets here. As for the details, I’m probably not the best person to ask. That house right there”–and he points to one across the way–“David Carroll lives there. He’s some kind of environmental expert. You should ask him.”

“David Carroll,” he announces, when he picks up the phone at his Towson office in early December. Carroll is the director of the Baltimore County Department of Environmental and Resource Management, an agency that manages a sewage system under a consent decree much like Baltimore City’s, which went into effect in 2005 and involves the same plaintiffs. He’s held similar high-level public positions as an environmental manager in Baltimore City and in state and federal government over the years, including a stint as MDE secretary under Gov. William Donald Schaefer in the 1980s and ’90s. This impressive résumé qualifies Carroll, in the words of his neighbor in Windsor Hills, as “some kind of environmental expert.”

But Carroll is also a longtime resident of Windsor Hills, where sewer leaks have historically plagued the city’s underground pipes, and that gives him some personal perspective on the impact of sewage on city neighborhoods, and the challenges of making improvements to sewer systems.

“Frankly, we haven’t tracked it all that closely,” Carroll says of the Windsor Hills community’s sewage-leak monitoring efforts. “We got together and started the Windsor Hills Conservation Trail, there at the end of Fairfax Road, and people out on the trail have been reporting leaks there for the last 10, 15 years. There have been lots of leaks reported over the years, but it’s been pretty sporadic, given the fact that we’re not really monitoring it in an organized fashion.

“The community association in the neighborhood has been working with the Windsor Hills Elementary School,” he continues, “to use those sanitary stacks sticking up in the stream along the conservation trail as education tools. And that’s important, because the neighborhood kids actually do swim in the Gwynns Falls. And, in fact, the effort’s working. There was an environmental festival for the schoolchildren down along the stream, and some kids jumped into a pool of water in the Gwynns Falls, and another kid said, `Get out of there! There are fecals all in there!’ He was talking about fecal coliform, and that kid understands it’s in the water and it’s dangerous, and he’s telling other kids that. That’s good.”

Carroll has heard of the ongoing stench and foul water coming out of the Linwood Avenue outfall–“that one’s pretty infamous,” he says–but he’s not convinced, even with all the expensive sewer reconstruction and extensive efforts to curtail the sewage entering the harbor, that the harbor will ever improve to the swimmable, fishable standard set forth in the Clean Water Act.

“When we get all the pipes working as they should, we’ll still have all this organic matter in the system–crap from geese and dogs and cats, dead animals, the grease and oil and food scraps and trash that gets washed off the streets, all the rest of it. And we’ll still have a problem. And then what are we going to do? But the first thing you got to do is get the human stuff out of there. And as this gets done, there will be major improvements in the amounts of raw sewage going into our streams.

“As for the city,” Carroll continues, “it’s just this network of really old sewers, and there’s a lot to do. Blockages occur in the main sewer lines, and the resulting backups usually cause leaks–that, or a standing [sanitary] stack gets severed, or a pumping station fails. Grease collecting in the lines and clogging them–that’s a big problem. The way we do it, every time that happens, if there’s anything at all that leaks–anything, it doesn’t matter if it’s a gallon or not–we have to report it to MDE and EPA, even if it doesn’t reach the waters of the state. It’s anything that leaks. Zero tolerance, that’s the threshold.

“But it’s not the amount of sewage spilled that matters,” Carroll emphasizes. “It’s the impact it has on water quality on an ongoing basis. And the big overarching context here is this–you want us to get swimmable and fishable waters, but how do you do that? Where has it worked? I’ve got sunfish in the Gwynns Falls, but is it really ever going to be safe to swim in it? Because there’s still going to be a lot of things that make the water yucky that are still going to be there, after all this work on the sewers is said and done. And that’s what the public, who’s paying for all of this, doesn’t seem to understand. It’s not the message they’re getting. They’re hearing that all this billion dollars of sewer improvements is going to make the harbor clean, but that’s simply not the case.”

City Paper awaits the outcome of the investigation EPA says it’s conducting into the sewage that comes out of the Linwood Avenue storm-drain outfall. Also pending are full responses from EPA, MDE, DPW, and DOJ to two November letters from City Paperabout a variety of consent-decree compliance issues that jumped off the pages of the EPA’s records. As a result of numerous 311 complaints describing what sound very much like sewage leaks that are discharging into city streets, gutters, and storm drains, and yet aren’t reported under the consent decree, a major question was whether the city has been routinely failing to report leaks as required. DPW provided a partial response in a Dec. 7 e-mail.

“The majority of the [311] complaints listed in your letter pertain to sewage in basements,” the statement reads in part. “These types of complaints are not applicable to reporting under the consent decree. At some locations listed, the 311 complaint code was characterized as a sanitary sewer overflow, however, there was no associated report sent to the regulators. This is due to a variety of reasons,” but in most cases “it appears that [DPW] corrected certain problems but did not observe a reportable discharge.”

In essence, the statement says DPW reports all sewer leaks, as required, without exception. Yet the Baltimore Sanitary Sewer Oversight Coalition’s Guy Hollyday says he’s been pointing out ongoing sewer leaks to DPW for years, and DPW’s been confirming that they exist and continue leaking, and yet many remain to be fixed. The group’s 2004 annual report, for instance, states that during that year DPW confirmed the existence of 17 ongoing sewer leaks around the city, yet they weren’t repaired. Some, Hollyday says in late November, still haven’t been.

The last time I checked, on the evening of Dec. 10, turbid, brown, debris-laden water was coming out of the Linwood Avenue storm-drain outfall, but it didn’t stink of sewage. The next day, Rick Edwards, the Randallstown truck driver, calls. That gray scum is building up on the hull of his boat, he explains, and he repeats that he’s about had it with all this sewage in the harbor.

“It smells like sewage half the time,” he says. “Everyone is talking about it–it’s a common issue.”

By all appearances, the stench in the harbor is not going to go away anytime soon, so everyone can still go on talking about it until it does–be that 2020, or beyond.

Federal authorities in Maryland have filed money-laundering charges against two men, Edward Courdy and Michael Garone, who have figured in an ongoing investigation into the internet gambling empire Bodog. Both men were described in two forfeiture proceedings earlier this year, which resulted in the seizure of a total of $24 million from numerous bank accounts, as processors of illegal gambling transactions in the United States on behalf of Bodog.

The charges against Courdy and Garone were filed on Sept. 29, though the filings were not publicized and were found yesterday by City Paper on the online federal courts web site, known as PACER.

Courdy is charged with transferring $2,380,273 in April from Dublin, Ireland, to a Nevada State Bank account held by Zaftig Instantly Processed Payments Corporation (ZIP Payments), and then to Maryland and elsewhere, to promote the carrying on of an illegal gambling business [Courdy Info]. Garone is charged with the same general scheme, alleged to have occurred in April 2007, involving the transfer of $1,499,975 from Frankfurt, Germany, to Branch Banking and Trust Bank account in Georgia held by JBL Services, Inc. [Garone Info].

The U.S. Attorney’s Office in Maryland confirms that the two men are not currently in custody on the charges, and that no court dates have been set in the cases. Spokeswoman Marcia Murphy says that the office cannot discuss the matters other than what is contained in the court filings.

The Sept. 29 filing the of Courdy and Garone charges coincides with the date that Courdy and ZIP Payments filed a claim in forfeiture proceedings involving $9,869,283.05, which was seized in July from several bank accounts tied to Courdy. Courdy and ZIP Payments, through their California attorney, Stanley I. Greenberg, are seeking the return of the seized money. Also filing a claim that day was 1st Technology, LLC, which recently won a $46,597,849 Nevada court judgment against Bodog and is seeking to collect part of the money by intervening in the ZIP Payments forfeiture proceeding.

Garone and his company, JBL Services, did not contest the federal forfeiture of $14,200,195.73 in alleged Bodog-related proceeds [Bodog Affadavit $14.2M]. In mid-July, Maryland U.S. District Court Judge Catherine Blake finalized the forfeiture of those funds.

Garone and Courdy could not be reached for comment. Greenberg, Courdy’s attorney in the forfeiture case, did not immediately return a phone call for comment.

The affidavits supporting the forfeiture proceedings describe in great detail the lengthy, convoluted efforts of Internal Revenue Service criminal investigator Randall S. Carrow to bring to light the global movement of money in support of Bodog’s on-line gambling activities. The documents also indicate that the case is being brought in Maryland because on-line gambling via Bodog was conducted by an undercover agent working in Maryland.

Bodog founder Calvin Ayre, a Canadian now living in Antigua, became a world-famous billionaire from online gambling and other entertainment enterprises. He was featured on the cover of Forbes magazine in 2006. Carrow writes in his affidavit that investigative interest in Bodog and Ayre started in 2003, but the passage of a 2006 federal law that strengthened prosecutors’ ability to go after on-line gambling activities kicked a formal investigation into gear.

As the Maryland-based federal probe of on-line gambling continues, the latest move to show up in court records in Baltimore is the seizure of $365,366.69 from two bank accounts in the name of Atrium Financial Group (AFG). According to the affidavit in the case (below), Delaware-based AFG disburses money to on-line gamblers, including those who try their luck using GoldenCasino.com. City Paper has been unable to reach representatives of AFG and GoldenCasino.com for comment.

The AFG seizure—unlike several others reported recently by City Paper—is supported by an affidavit that was not sealed (see Atrium Financial Group affidavit). The 13-page sworn statement by Immigration and Customs Enforcement (ICE) special agent Augusta Ferenec, who is based in New Orleans, La., provides a peek into the complexities of the investigation. Signed on Sept. 4 by U.S. District Court magistrate judge Beth Gesner, the warrant was filed in the court records on Oct. 22.

According to Ferenec’s affidavit, the investigation leading to the AFG seizures dates to July 14, 2008, when Louisiana State Police (LSP) officers opened an “undercover gambling account” with GoldenCasino.Com, and then later requested a payout. The first check–from a Canadian outfit called Interco Finance Corporation (IFC)–bounced. Eventually, a second check came, this one from AFG. Thus, the investigation established that GoldenCasino.com was using both IFC and AFG as payment processors for its on-line gambling patrons. Ferenec explains in the affidavit that a fourth business–Con-Tex Converters, another Canadian firm–entered the picture as investigators followed the global movement of funds.

For instance, an AFG account with Mercantile Bank received wire transfers between Dec. 2008 and Jan. 2009 amounting to more than $1.5 million. The money came from a Con-Tex bank account in Cyprus and a combined Con-Tex/IFC bank account in Canada. During the same timeframe, Ferenec’s affidavit continues, AFG cut 1,473 checks from that account, at least two of which went to people in Maryland. In Aug. 2009, investigators talked to one of the Maryland recipients, who admitted the proceeds had come from gambling.

In all, Ferenec’s affidavit maps out a total of nearly $6.3 million wired internationally by either Con-Tex or IFC to AFG bank accounts in the U.S. The AFG accounts, which the affidavit says have all been closed by the banks due to suspicions that the money was tied to illegal gambling, were held with Mercantile, Sovereign Bank, Wachovia Bank, National City Bank, and TD Bank North. The international wire transfers from Con-Tex and IFC were the sole sources of funds in the AFG accounts, the affidavit explains.

The two AFG bank accounts targeted for seizure are with Fifth Third Bank and Wilmington Savings Fund Society. The Fifth Third account, from which $124,028.88 was seized, received about $3.3 million in wire transfers from Con-Tex and IFC between Dec. 2008 and June 2009, the affidavit explains. Nearly 4,000 checks were cut from the account, totaling about $3.1 million disbursed to people in the U.S. During July and Aug. 2009, 35 of those checks were issued to Marylanders. The amount of money entering AFG’s Wilmington Savings account is not specified in the affidavit, which explains that about 575 checks were cut from the account, one of which was mailed to a Texan who “confirmed to the bank that the check was proceeds of online gambling.”

Ferenec’s affidavit says it’s likely that money will continue to enter the targeted accounts “for a period of time” after the warrants are executed, because those involved “will be unable to promptly stop the flow of funds or inform all of their contacts of this investigation.” Thus, Ferenec requests that the warrant order the banks to allow the deposits to continue, but not any attempted debits, and that “ICE be allowed to periodically remove such funds” during a 21-day period after the warrants are executed.

On Dec. 21, 2006, someone in Maryland opened an account with bodog.com, an online gaming site whose customers bet on sports and horse-racing and play poker and casino games on their computers. The same day, that same someone placed two online bets on football games with Bodog. Over the course of 2007, after more wagering, the online gambler requested and received two payout checks from Bodog: one for $1,500 and another for $700.

Mundane as they may seem, the Maryland gambler’s wagers and payouts have had major repercussions in the online-gambling world. That’s because, starting in 2008, the details of that person’s online betting activities were included in meticulous affidavits supporting warrants to seize the contents of bank accounts said to be tied to illegal gambling. The Maryland gambler was actually a special agent working undercover for the U.S. Internal Revenue Service (IRS) Criminal Investigation Division.

Under U.S. law, facilitating transactions tied to online gambling is illegal. Yet, due to the immense popularity among Americans of wagering over the internet, the overseas companies that provide this kind of entertainment continue to seek ways to do business with U.S. customers. In order to pay out winnings to gamblers in this country, they have to hire U.S. companies willing to operate as payment processors–middle-men who take foreign casino companies’ money and disburse it to players when they want to cash out their online gambling accounts. These payment processors are taking a risk that U.S. law enforcement will detect the transactions and seize the money while it’s sitting in the payment processors’ accounts–which is exactly what federal investigators in Maryland, and elsewhere, have been doing–but due to the lucrative nature of the business, both the payment processors and the online-casino companies have been willing to take that gamble.

In the post-Sept. 11 world, the U.S. government has developed a heightened interest in augmenting its ability to track the ways and means of global money-moving. Though the motivation is to protect the world from terrorists by interrupting their finances, this trend also means that financial crimes of all kinds–including the movement of online gambling money into the United States–face a greater risk of detection. In the world of internet wagering, whenever money is sitting in a U.S. bank account, it is exposed to possible seizure by the authorities. And, as investigators’ successes mount, it’s clear they are getting better at it.

IRS criminal investigators in Maryland “opened a formal investigation of Bodog in 2006,” court records state, after having “conducted interviews regarding Bodog.com, Calvin Ayre, and Bodog’s operations in approximately 2003.” Ayre, a Canadian who’s been living in exile for several years now, is the founder of Bodog, which is based in Antigua and has operations in Costa Rica.

Bodog, a 15-year-old company which claims to be the world’s pre-eminent online gambling site and whose operations span the globe, is not the first to be targeted by American law enforcement’s crackdown on internet gambling. That honor goes to Jay Cohen, who in 1998 was indicted in New York along with numerous other defendants for violating the federal Wire Wager Act in running the Antigua-based World Sports Exchange. Cohen fought the charges, saying federal laws prohibiting wire transfers of gambling proceeds do not apply to the internet. He lost and was sentenced to 21 months in prison. Since then, the feds have continued to focus on an industry that, in effect, presents opportunities for people to gamble anywhere and anytime, despite the laws of any particular country or state.

“If you’re in Antigua running a casino, that’s fine,” says Maryland U.S. Attorney Rod Rosenstein. “But if you’re actually operating a casino in someone’s bedroom in Montgomery County over the internet, that’s illegal.” Thus, any proceeds that can be traced to gambling activity that takes place in Maryland–whether it’s actual betting over the internet, or just the arrival of checks in the mailboxes of Maryland gamblers cashing out their online-gambling accounts–could end up seized by Maryland authorities.

Since early 2008, according to federal court records, the ongoing federal investigation of online gambling based in Maryland–which, in addition to the IRS, also involves members of a Department of Homeland Security Immigration and Customs and Enforcement (ICE) task force–has brought at least $29,206,594.62 in alleged gambling proceeds into federal coffers. The latest warrant in the investigation was signed by U.S. magistrate judge Paul Grimm in early February, and it targeted the contents of a Mercantile Bank account in Tampa, Fla. The account, held in the name of a company called Direct Channel LLC, yielded $860,335.90 on March 5. Direct Channel, like the other companies included in the Maryland internet-gambling seizures, allegedly provided payment-processing services in the U.S. for gambling web sites based in other countries. Though the Maryland investigation initially appeared to focus on payment processors for Bodog, such as Direct Channel, it has since broadened to include funds held by companies serving another gambling site, goldencasino.com, which is also based in Antigua.

Any U.S. bank account used by a payment processor working with online casinos could be targeted by investigators, potentially wiping out millions of dollars when a seizure warrant arrives at the bank. But due to the magnitude of online gambling in the United States–half of the $16 billion per year that internet gambling is estimated to generate is believed to originate in the United States–the risk may be worth it. Though federal investigators in Maryland and elsewhere, including New York, Missouri, and Florida, go for the money, there’s so much in play at any given moment that what they seize is only a small portion of money flow.

So far, after several years of effort, Maryland law enforcers have seized nearly $30 million in suspected online-gambling proceeds. That’s equal to less than one half of one percent of the $8 billion that U.S. online gamblers are estimated to spend each year. But it’s a start. And as the effort builds and grows more sophisticated and nimble with experience, the potential is as vast as the American online-gambling economy itself.

“There are very big numbers in internet gambling,” say Rosenstein, acknowledging the sizeable cut the government could get through seizing and forfeiting assets, which are funneled into law-enforcement budgets to support the efforts of the agencies that seized them. Asked if seizures, in the long run, could undermine gambling web sites’ ability to pay out to U.S. customers, he says: “That’s a possibility, and it’s certainly a risk for customers. And it’s a pretty effective deterrent, since customers have no remedy if the gambling operator fails to pay. They won’t be able to go into court and enforce that. It’s an illegal contract.”

Seizing and forfeiting criminally derived assets, including those from online gambling, has been made a priority by Rosenstein’s office. Last year, he hired the nation’s top asset-forfeiture prosecutor–Stefan Cassella, who literally wrote the book on the subject, a 950-page tome entitled Asset Forfeiture Law in the United States–to lead the effort. Among Cassella’s achievements is the largest forfeiture in U.S. history: $1.2 billion from the Bank of Credit and Commerce International in the 1990s. Given the size of the online-gambling industry’s assets, Cassella may have an opportunity to break his own record while working in Maryland.

Law-enforcement efforts to interrupt internet-gambling money flowing in and out of the United States were ramped up after the 2006 passage of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was signed by President George W. Bush in October that year. Before that law was passed, the federal Wire Act, which dates back to 1961, already prohibited the transfer of gambling proceeds via wire communications. That law had been used to go after internet gambling prior to the UIGEA’s passage. But unlike the Wire Act, the UIGEA specifically outlaws internet-gambling transactions and requires financial operators, such as banks and payment processors, to determine which transactions are tied to online gambling and report them to regulators.

The banking industry, concerned that UIGEA requirements would be difficult to enforce and would force bankers to become anti-gambling police, persuaded the Obama administration to postpone the law, scheduled for implementation in December 2009, for six months. U.S. Rep. Barney Frank (D-Mass.), meanwhile, is currently trying to usher through legislation that would repeal the UIGEA and instead set up a regulate-and-tax scheme for the industry, arguing that online gambling is a liberty–and a potentially large source of public revenues–that the government should not prohibit.

But Rosenstein contends that going after the illegal profits gained from the U.S. market for internet gambling is a matter of fairness. “What Americans find particularly galling,” he says, “is when something is criminalized, honest people don’t engage in the activity, but criminals do, so they get excess profits because their only competition is from other criminals.”

Those seeking to legitimize aspects of online gambling, though, have other thoughts on the matter. Last year, in trying to persuade a federal judge to release funds seized from a payment processor allegedly tied to online gambling, lawyers for the Poker Players Alliance (PPA), a Washington, D.C.-based interest group, argued that online poker is a game of skill, not of chance, and thus is not illegal gambling. They also contended that the UIGEA establishes criminal culpability for “persons who operate illegal gambling sites, rather than those who process payment transactions,” and that restricted transactions under the UIGEA do not include funds going to a gambler because a gambler is “not engaged in the business of betting or wagering.”

The lawyers for the PPA (whose motto is “Poker is not a crime: Join the fight.”) did not prevail. But their efforts–and the well-heeled existence of the PPA, which has its own lobbying arm, PokerPAC, and whose board is chaired by former U.S. Senator Alfonse D’Amato (R-New York)–indicates that powerful forces in American society don’t like the online-gambling crackdown. Recent public-opinion polling, though, indicates the prohibition of online gambling is popular; two-thirds of those responding to a Fairleigh Dickinson University poll released on March 11 say they do not favor legalizing it.

Though online gambling is legal in many parts of the globe, enjoyed by many Americans, and accepted in many cultures–to the point that online-gambling companies’ stocks often are publicly traded in other nations–its continued prohibition in the United States may be explained by the longtime association of the gambling industry with unseemly characters making obscene profits.

Recent cases against internet gambling operations, for instance, give a sense of the profit potential the business presents and sometimes allege organized-crime ties. In New York in October 2009, the operators of Panama-based betonline.com were charged with illegal online gambling; authorities claimed the group made $587 million in 28 months and was linked to the Gambino and Genovese crime families. In a 2006 Missouri case against the longtime gambling figures who ran Costa Rica-based betonsports.com, the indictment states that the company’s promotional materials boasted “100,000 active players, who placed 33 million wagers, worth over $1.6 billion” in 2003, before the company went public on the London stock exchange. In February, Missouri authorities indicted the operators of Costa Rica-based Elite Sports, which ran the web sites best24b.com and best24b.net, and among the defendants were members of the Kansas City’s storied Cammisano crime family.

In addition, federal authorities in New York have charged two men–Anurag Dikshit in 2008 (Dikshit NY info) and Douglas Rennick in 2009 (Rennick indictment)–with illegally running online-gambling ventures. Dikshit, who was born in India and is one of the youngest billionaires in the world thanks to the success of his online-gambling business, is co-founder of the Gibraltar company that operated partypoker.com; charges against him include the forfeiture of $300 million in gambling revenues. Rennick, a Canadian, ran a series of payment-processing companies that allegedly served the internet-gambling industry, and the government is seeking to forfeit more than a half billion dollars of the proceeds from his financial dealings.

Another alleged payment processor was charged in Florida in February, when a bank alerted federal authorities that customers were trying to cash large checks they said were the payouts from online-gambling winnings. Michael Olaf Schuett, a German man living in Naples, Fla., had set up hundreds of companies and had dozens of bank accounts that were allegedly used to operate the scheme since 2007. The complaint against him (Schuett FL complaint) says that he transferred online-gambling payments to about 23,000 people, mostly in the United States, and that the total amount of money involved was $70 million.

In what may have been the first federal gambling case involving the internet in Maryland, IRS investigators and Montgomery County police teamed up to bust a ring that, in 2003 and 2004, handled action from Maryland customers on behalf of a Dominican company called World Wide Wagering, which runs the web site wager.dm. The conspiracy case, which ended with the convictions of seven men from Montgomery County, Baltimore, and Florida, followed the money flow to and from bettors and the defendants. The case included the cashing of more than $150,000 worth of checks at University Liquors in Hyattsville.

Just as IRS agents in Maryland were cracking the World Wide Wagering case, they started looking into Bodog. But it wasn’t until December 2006, shortly after the UIGEA was signed into law by then-President George W. Bush, that the Bodog investigation got serious–it began with an investigator logging onto the web site, posing as a customer, and starting to gamble.

Once the investigator started receiving payout checks in 2007, the money trail could be tracked. In the meantime, the investigation gained a cooperating witness from inside the internet-gambling industry, who corroborated facts about Bodog’s operations, including the contention that “Bodog takes in from $250,000 to millions per day on sports bookmaking alone,” court records show. An informant also helped out by corroborating facts based on experience using Bodog’s site to gamble in Florida. The informant was able to explain the betting process to investigators; additional information was gleaned from investigators working online-gambling probes in other jurisdictions.

By 2008, sufficient cause had been established by Maryland IRS investigators to seize funds from the bank accounts of three payment-processing companies suspected of handling funds for Bodog: JBL Services and Transactions Solutions in Georgia (JBL forfeiture), and a California company called ZAFTIG Instantly Processed Payments Corp., operating as ZipPayments.com.

On Jan. 18, 2008, U.S. District Court magistrate judge Beth Gesner signed a search-and-seizure warrant application for bank accounts in the name of JBL Services and Transactions Solutions; $14,200,195.73 was seized. On June 28, 2008, U.S. District Court magistrate judge Susan Gauvey signed another warrant application for ZipPayments.com bank accounts, which yielded another $9,869,283.05. By July 2008, the U.S. Attorney’s Office in Maryland had filed forfeiture actions against both pots of money. The legal actions were based on lengthy affidavits written by IRS criminal investigator Randall Carrow.

In September 2008, the case against ZipPayments.com’s money suddenly heated up. A claim for nearly $10 million was filed by ZipPayments.com and Edward Courdy, a California man who sought to have the money returned, saying it was lawfully his. Within days of filing his claim, Courdy was charged with money laundering, as was Michael Garone, a Georgia man connected to JBL Services and Transaction Solutions (“Bodog Internet Gambling Investigation Leads to Money-Laundering Charges,” Mobtown Beat, Oct. 30, 2008). In February 2009, as a result of a forfeiture settlement negotiated by Courdy’s attorney, Stanley Greenberg, and assistant U.S. attorney Richard Kay, the government returned $200,000 of the ZipPayments.com money to Courdy, and kept the rest.

Today, the status of the criminal cases against Courdy and Garone is unclear. Some time in the fall of 2009, a little over a year after they were filed, the online records of the cases against them disappeared from the federal court-records database system, known as Public Access to Court Electronic Records (PACER). Since Maryland’s federal courts handle only electronically filed documents, PACER is the only repository of its records. The disappearance from PACER of Maryland criminal case numbers 08-454 (against Courdy) and 08-455 (against Garone), creates the illusion that they were never filed at all–though City Paper still has copies of the documents charging them, which bear Rosenstein’s signature. Despite City Paper‘s requests for explanation, the U.S. Attorney’s Office in Maryland has remained mum about what happened.

Courdy’s lawyer, Greenberg, has consistently declined City Paper‘s request for comment about his client’s troubles in Maryland. Efforts to contact Garone, and to identify his lawyer in the Maryland case, have been unsuccessful.

After the money seizures and criminal charges involving Courdy and Garone were filed, the online gambling investigation in Maryland appears to have shifted from the IRS to Immigration and Customs Enforcement–and the level of secrecy surrounding the investigation increased. Though numerous search-and-seizure warrants have been filed for the contents of bank accounts and an e-mail account associated with payment processors since last summer, nearly all of them were granted under seal, so probable cause for the seizures has not been revealed to the public.

Despite the secret nature of many of the seizure filings, certain information about them is available. Three ICE task force members in Maryland–Maryland State Police trooper Robert J. Mignona, ICE special agent M. Lisa Ward, and Anne Arundel County Police detective Richard S. Gunn–and one ICE special agent in Louisiana, Augusta B. Ferenec, filed the warrant applications. The companies whose bank accounts have been seized–HMD, Forshay Enterprises , and Electracash in California; Atrium Financial Group (AFG) in Delaware; and Direct Channel in Florida–are in the payment-processing business. The amounts seized so far from these companies’ bank accounts add up to $5,137,115.84. And, in the case of Electracash–a business that has past associations with Courdy–warrants have been issued not only to seize the contents of bank accounts, but of an e-mail account the company has with Intermedia, a New York City communications company. (The Electracash e-mail warrant, unlike the bank-account seizures, so far has yielded nothing, court records show.)

One of the unsealed search-warrant affidavits–the one filed early this year against Direct Channel’s bank account in Florida–was written by Ward, but draws directly from the IRS affidavit in the Courdy and Garone seizures, and thus sheds no new light on the investigation’s details. The other unsealed warrant, against Atrium Financial Group and written by Ferenec, shows that ICE’s financial-investigations group in New Orleans, La., along with the Louisiana State Police, are in on the Maryland probe (“GoldenCasino.com’s Payment Processor Targeted in Latest OnLine Gambling Seizures in Maryland,” The News Hole, Oct. 28, 2009).

The Louisiana end of the Maryland investigation began on July 14, 2008, when Louisiana State Police officers opened a gambling account with goldencasino.com. They did not immediately succeed, because the bank they were using to deposit $100 into the gambling account apparently blocked the transaction. On the second try, though, they succeeded. They then requested a payout.

The first payout check bounced, but the second one, from AFG, cleared, and the investigators, using information they gleaned from their transactions, used their investigative powers to start on up the money trail. They discovered funds moving between Canadian companies’ bank accounts in Canada and Cyprus and on to AFG bank accounts in the United States, which then issued checks to U.S. residents, including in Maryland. The transactions they tracked involved millions of dollars zipping across the globe.

“Because of enhanced monitoring of financial transactions since Sept. 11, we have a much better handle on the movement of funds,” Rosenstein says about the ability of investigators to dig into the online-gambling industry. In fact, the affidavits of investigators Carrow and Ferenec indicate that initiating a successful seizure of funds from payment processors doesn’t require particularly sophisticated investigative techniques. The trick, it seems, is trying to pinpoint where the money will be at any given moment, hoping to gain court orders to freeze it, and seize it before it shifts yet again.

Rosenstein points out another challenge investigators face in trying to seize online gambling funds: While it’s relatively easy to go after funds in U.S. accounts, going after offshore accounts–where the big money is, since that’s where the online gaming companies operate–is tricky.

“It’s similar to the challenges we face with child pornography, which is often stored overseas and transported to the United States over the internet,” Rosenstein says. “The degree of international cooperation with regard to child pornography is far greater than with offshore gambling, though. But we can readily intercept the money flowing through financial institutions that we have jurisdiction over.”

Rosenstein says online gambling can be prosecuted anywhere that customers are located, and that the public should expect to see more enforcement efforts taking place in more jurisdictions. He says that criminal activity is increasingly becoming more internet-based, and that investigative agencies are becoming more focused on financial crimes. They’re also becoming more sophisticated when it comes to following the money.

“Anything that illegally generates large amounts of money is a concern on many levels,” Rosenstein says. “People engaged in such conduct may be committing other crimes. They may not be paying taxes, and they may be investing in other illegal activities.”

MARINE CORPS BASE CAMP LEJEUNE, N.C.  Spice is originally sold as an incense, but has now swept the military community with controversy as a legal designer drug. However, Marine Corps Order 5355.1, issued Jan. 27, directly prohibits the use, distribution, sale and possession of it and others like it. (Courtesy photo)

By Van Smith

Published in City Paper, Oct. 13, 2013

Photo: commons.wikimedia.org

Dev Bahadur Hamal worked behind the counter of the Tobacco Stop in Bel Air, one of those ubiquitous shops that sell legal smokables and accessories for illegal ones, like bongs, hookahs, rolling papers, pot grinders, and glass pipes.

On Sept. 22, 2011, a customer stepped up to the counter and asked whether the Tobacco Stop sold “Hysteria.” Hamal nodded and sold him a 1-gram packet of the stuff, labeled “potpourri” that is “not for human consumption,” for $21.20. The customer held his hand to his mouth while pinching together his thumb and index finger, and asked if “you smoke this stuff.” Hamal said, “Yes.” Pointing out that his pipe wasn’t working properly, the customer asked for rolling papers, and Hamal said the stuff was “very strong,” urging caution if smoking it that way.

Hamal’s helpfulness has been memorialized in numerous federal court documents in the years since, causing no end of trouble.

The customer, it turned out, was an undercover officer working for the U.S. Drug Enforcement Administration (DEA). Hysteria, subsequent testing confirmed, was a kind of illegal designer drug popularly known as “K2” or “Spice,” said to mimic the effects of pot. Hamal had unwittingly spawned a cross-country probe into an alleged illegal Spice supply line to Maryland from California.

Spice contains what the law calls “analogue” compounds that are “substantially similar” to controlled dangerous substances and which are barred from making, distributing, or possessing “for human consumption” – which is why the Hysteria packaging, in an effort to sidestep this provision, dubbed it “not for human consumption.”

The federal statute outlawing such analogues, the Controlled Substance Analogue Enforcement Act of 1986 (AEA), is designed to give law enforcers flexibility in quickly swatting down the availability of substances that crop up in the marketplace after being chemically tweaked to differ slightly from already-banned ones. Until the DEA temporarily bans them by listing them under the AEA, or until they can be shown to be analogues of substances already so banned, people buy them as legal highs-and the manufacturers, wholesalers, and retailers make legal money.

The list of chemicals banned under the AEA has itself been tweaked repeatedly over the past two years, amid mounting public concern over designer-drug users being poisoned by Spice and another family of analogues, called “bath salts,” said to ape the effects of illegal stimulants such as cocaine and methamphetamine.

Since 2011, according to a recent Congressional Research Service report, the DEA has used its AEA powers to ban 11 synthetic designer drugs. Congress, meanwhile, passed legislation signed in 2012 that added some of the same drugs and others-a total of 26-to the nation’s main anti-narcotics law, the Controlled Substances Act (CSA).

The dizzying pace of analogue bans is understandable, since the dangers of these little-understood chemicals have become alarmingly apparent. Widely publicized tragedies have mounted among users, who, while under their influence, have committed suicide, died of overdoses, and inflicted senseless violence on others.

Also understandable, given these horror stories, is the tremendous amount of resources the federal government has thrown at deterring those in the analogue trade.

The probe spawned by Hamal’s helpfulness at the Tobacco Stop was, on July 26, 2012, revealed to be part of something much bigger. That’s when the DEA unveiled “Operation Log Jam,” the first nationwide effort to crack down on analogues. Nearly 100 communities around the country were impacted, resulting in nearly 100 arrests and the seizure of more than $36 million and 5 million packets of designer drugs, along with chemicals to produce nearly 14 million more. Among those targeted was the Tobacco Stop’s California supplier, whose bank accounts were emptied of $2.2 million-about 6 percent of Operation Log Jam’s total cash take.

After Operation Log Jam, a second DEA push was announced in June: “Project Synergy,” said to have yielded about 230 arrests in nearly 50 cities and five countries, with more than $51 million and thousands of kilograms of designer drugs seized.

The crackdown has put people and businesses, some perhaps unknowingly, on the wrong side of what critics call a highly confusing law and has created a new and growing class of drug defendants – or sometimes plaintiffs, when people whose assets were seized seek their return. Some of them, including the Tobacco Stop’s California supplier, are fighting back, trying to convince judges that the law is unfair and prone to arbitrary enforcement because it is hopelessly hard to understand.

That’s predictable – it’s what attorneys do. But the designer-drug game is different than the traditional law-enforcement dramas that play out on the streets every day. When it comes to heroin and cocaine, everyone knows what the rules are: Dope and coke are illegal, case closed, so court arguments tend to be over evidence and how it was obtained.

But the rules of the designer-drug game changed rapidly in the last two years, and those who possessed or distributed chemicals might not have had a clue about their chemical structures or effects on humans. Those fighting back are attacking the rules themselves.

Now, though, after the headlines about the arrests, seizures, and successful prosecutions resulting from Operation Log Jam and Project Synergy, one thing should be abundantly clear: It’s a risky proposition to sell anything exotic that’s construed as a legal high.

Nine months after Hamal’s Hysteria sale to the undercover officer and nearly 2,700 miles away, on June 12, 2012, Ratchanee McAuley was at M&C Wholesale. The business occupied three suites in a one-story, block-long commercial building in Laguna Niguel, Calif., in Orange County, south of Los Angeles. Around noon, the 40-year-old from Arizona and four others unloaded a Rapid Express truck delivering packages to M&C. Then McAuley took her small white dog for a walk.

As the day wore on, pallets of white canvas bags about the size of sandbags were moved around M&C’s suites, and more deliveries arrived, including boxes filled with black foil packaging. The business made and received lots of deliveries – its FedEx bill for a four-month period that year was over $100,000. Just after 6 p.m., McAuley put her dog in a silver Land Rover, drove to a house in nearby San Juan Capistrano, checked the mail, and walked toward the front door.

These glimpses of McAuley and M&C come courtesy of David Metzler, a Howard County cop assigned as a task-force officer to DEA’s Tactical Diversion Squad 59. He went to Laguna Niguel and observed them himself, then meticulously described what he saw in numerous sworn court documents. He also swore out the details of Hamal’s Hysteria sale-and much more, involving others at M&C and at another Baltimore smoke shop, the Dragon’s Den on Fleet Street in Fells Point.

At the Dragon’s Den in the fall and winter of 2011, Carlo D’Addario of Timonium had sold bath salts to people from Virginia, and federal authorities there indicted him for it in early 2012. D’Addario’s co-defendant, Holly Renae Sprouse of Craigsville, Va., near Shenandoah National Park, helped build evidence against him, and both would later plead guilty and receive relatively short sentences-a year in prison for D’Addario, and 20 months for Sprouse.

Shortly after D’Addario’s indictment, under the supervision of Metzler’s crew, orders for Spice were placed from the Dragon’s Den to M&C, where the Tobacco Stop had gotten its Hysteria.

By June 2012, after serving search warrants for email accounts and making the controlled buys orchestrated at the Dragon’s Den, Metzler’s team had good reason to suspect M&C supplied Spice products, branded with names such as “Hysteria,” “Brain Freeze,” “Dr. Feelgood,” and “Black Sabbath,” to the Tobacco Stop, the Dragon’s Den, and other such shops in Indiana, Kentucky, and New York.

On July 25, 2012, M&C Wholesale was raided and its bank accounts emptied. The next day, the DEA announced Operation Log Jam, explaining in its press release that the AEA “allows these drugs to be treated as controlled substances if they are proven to be chemically and/or pharmacologically similar to a Schedule I or Schedule II controlled substance,” including anything from pot and heroin to prescription painkillers and methadone.

The raid on M&C turned up several thousand pounds of suspected Spice, several kilograms of suspected analogue chemicals used in making Spice, and several thousand packets of Hysteria, Brain Freeze, and other brands of Spice.

Metzler had good cause to suspect they’d find such a haul. On July 17, about a week before the raid, he’d spoken with a courier who’d made deliveries at M&C and described seeing “8-10 individuals seated around a table handling piles of a green herb-like substance”-“no other sort of activity seemed to be ongoing.”

These observations, Metzler wrote in court records, “are entirely consistent [with] M&C Wholesale being exclusively devoted to the manufacture and distribution of analogue substances.”

No federal criminal charges have yet been filed publicly against anyone involved with M&C’s operation. Nor have charges been filed against Hamal or the Tobacco Stop’s owner, Kyu Tae Yi.

Others have not been so fortunate.

In September, federal prosecutors in Maryland moved to keep $105,574 seized from Bruce Lloyd Bradburn and his business, the Dundalk smoke shop Up in Flamez, in part because “large quantities of synthetic marijuana” were found in the store and in Bradburn’s nearby home. As a result of the probe, Bradburn is currently scheduled for a December trial on narcotics and gun charges in Baltimore County Circuit Court.

Earlier, in August, federal prosecutors filed suit to keep $259,988.61 seized in a synthetic-drug investigation of three Puff & Stuff smoke shops in the Cumberland area of Western Maryland. Puff & Stuff’s owners, Traci Lynn and Charles Casey, have filed claims in the matter, asserting “a legitimate and lawful interest” in the cash, which they say they “earned, saved, and acquired through lawful employment and enterprises.” But the probe prompted drug-conspiracy indictments against the Caseys in Allegany Circuit Court, and both are scheduled for separate trials later this year.

Also this year, three men – Nathaniel Petit, Andrew Burger, and Joshua Sylvia – were charged and pleaded guilty in a conspiracy to distribute methylone shipped here from China. Methylone is used to make bath salts, and though banned temporarily under the DEA in 2011, it was only in April of this year that methylone was listed as a drug banned by the CSA. Shortly thereafter, Petit, Burger, and Sylvia were charged in Maryland federal court, though they were caught in June 2012 and initially charged in state court. They are scheduled to be sentenced later this year.

These new Maryland cases show how effectively synthetic-drug laws can be enforced to punish accused Maryland criminals and to try to take their ill-gotten gains. Sprouse’s lawyer, Fred Heblich, a veteran federal public defender in Virginia and a lecturer at the University of Virginia School of Law, says criminal cases involving analogues are hard for defendants to beat.

“The way that the statute is written is very broad,” Heblich says, “so that the legal definition of an analogue is not specifically the same as the scientific definition.” This means cases are “easy to prosecute because the courts don’t require scientific accuracy.” So, in a typical case in which a prosecutor is trying to prove a chemical is an analogue of a banned substance, the prosecutor simply calls to the stand a “DEA chemist who testifies they’re similar,” Heblich explains, “and then brings in a user, who says it’s similar – ‘I’ve used that stuff and it’s a lot like meth.'”

Heblich says Spice cases are “a little different animal than the bath salts-like pot and meth are different.” Law enforcers might find “Spice is less worthwhile to pursue because it doesn’t have the cachet of bath salts – there are no stories of people eating people on Spice,” Heblich says, referring to a story last year in Miami that went viral with the false information that a man who attacked another man by chewing his face was on bath salts. And bath salts, more than Spice, pose a greater law-enforcement problem, he adds, because “there are hundreds of them, and you could create thousands of analogues of this stuff.”

In bringing analogue cases to criminal court, though, the defendant is at a distinct disadvantage, Heblich says, because “the judges let the government put in whatever evidence they want, and the jury is going to convict.”

When asked about probes that have resulted not in criminal charges but in asset-forfeiture cases, Heblich says law enforcers “will go after you if you have money – that’s all they care about now.”

Analogue cases that go after alleged manufacturers’ assets have shown some potential to reveal the AEA’s frailties – such as the forfeiture case against M&C, filed in November 2012, which seeks to keep the $2.2 million seized from the company’s bank accounts, along with 34 money orders and 102 checks made out to the company. Like other Operation Log Jam forfeiture cases elsewhere, this one has not been easily concluded.

This summer, after Maryland Assistant U.S. Attorney Evan Shea filed an amended complaint in the case with U.S. District Judge Ellen Hollander, M&C’s attorneys, Randall Skeen and William Feldman, moved to dismiss it. They argued that the government failed to establish a fundamental common-law principle: mens rea, which is Latin for “guilty mind.” No evidence, they claimed, had been produced to show that M&C and its operators “actually knew that the substances at issue were unlawful.”

The reason the government hadn’t shown this, the lawyers continued, is that the AEA is so “unconstitutionally vague” that “a person of ordinary intelligence would have no way to reasonably learn that these substances are unlawful and thus have an opportunity to conform their conduct to the requirements of law.”

Shea swatted down these arguments in a brief filed in August, citing abundant precedent that the AEA-even when applied to recently banned substances and their analogues-consistently has been ruled not unconstitutionally vague.

Then M&C attorneys’ reply cut to the core of the matter: money. Any proceeds derived from M&C’s sale of Spice before March 1, 2011, the date the compounds involved were temporarily banned by the DEA, should not be forfeitable, they argued, nor should any proceeds that haven’t been shown to be connected to sales of banned substances. This, they claim, comes to $1,829,784.50 plus interest “based upon the government’s improper seizure.”

While M&C’s motion to dismiss the Maryland forfeiture is awaiting a ruling by Hollander – and while a related suit M&C filed in Utah, where some of its money was seized, has been put on hold pending Hollander’s decision – in Florida, a whale of an Operation Log Jam forfeiture fight is underway.

In Operation Log Jam’s Tampa-area takedown, over $18 million, a handful of homes, and a brand-new Infiniti belonging to Timothy Hummel and his family were seized. Hummel, his family, and his colleagues in an alleged Spice-manufacturing operation have not been charged criminally, and they want their property back – but the government has moved to keep it. In working to have the case thrown out of court, Hummel’s lawyers, James Felman and Katherine Yanes, have tossed around some weighty rhetoric and strong claims.

Calling the Hummel forfeiture and Operation Log Jam “the latest installment of the modern American assault on the bedrock principle of mens rea” and “the first instance in the history of the Republic in which the government has sought to seize assets – and potentially imprison its citizens – based on conduct that it literally would not have been possible for the citizenry to know was unlawful,” the lawyers argued that, in Hummel’s case, the government is doing this based on “a single man-a chemist employed by the DEA named Terrance Boos.”

Boos, according to court records, testified in February at another federal proceeding in Wisconsin, offering his scientific opinion that two compounds-XLR11 and UR-144-are banned analogues under the AEA’s standards, and that he was not aware of anyone at DEA who disagreed with that conclusion.

But Hummel later obtained government documents showing that wasn’t the case-that, in fact, as Hummel’s lawyers put it, “an entire Section of the DEA disagreed not only with Dr. Boos’ conclusion that UR-144 is an unlawful analogue, but also with his authority to reach such a conclusion on behalf of the agency.”

The Wisconsin case Boos testified in was heard by veteran U.S. District Judge Rudolph Randa, a Vietnam War veteran who was appointed by President George H.W. Bush and served until 2009 as the chief judge of the state’s eastern district. It involved $100,000 worth of “herbal incense” that was seized in September 2012 from The Smoke Shop in Delavan, Wis., by law enforcers who wanted to test it for illegal analogues. When they wouldn’t give it back, the owner sued for its return.

After late-winter hearings and briefings, Randa noted that “the overwhelming weight of opinion in the scientific community” is that the substances found in the incense, UR-144 and XLR-11, “are not substantially similar to the chemical structure” of an already-banned substance, JWH-018, and therefore could not be ruled analogues.

On May 16, though, in the midst of the litigation, DEA put UR-144 and XLR-11 on the list of temporarily banned analogues.

Less than a week later, on May 21, Randa concluded in an order that, given DEA’s new ban, he had no choice but to dismiss the Smoke Shop’s suit. In doing so, though, he leveled some blunt criticism of the way this complicated law is being enforced.

“Under this scenario,” Randa wrote, “it seems unfair for a federal agency to seize the property of a small business owner and then keep it until it is declared illegal.”

There you have it: a federal judge saying what defense attorneys have been arguing, so far without success – that law enforcers’ approach to leveraging the AEA’s significant powers in expanding the menu of banned analogues, in one instance at least, “seems unfair.”

MDPV

Attorneys attacking the AEA often turn to a memorable critique penned in 2008, well before the recent spate of analogue bans: the act’s definition of an analogue is an “unholy union of legalese and chemistry jargon [that] is probably enough to bewilder even the most studious individuals,” Gregory Kau concluded in “Flashback to the Federal Analog Act of 1986: Mixing Rules and Standards in the Cauldron,” an article in the University of Pennsylvania Law Review.

Still, arguing that the AEA is so vague that people can’t reasonably be expected to know whether or not they are breaking it has not been received well by courts. Over and over again, the argument has been rejected.

A high-profile Operation Log Jam defendant in Arizona, Michael “Rocky” Lane, for instance, got nowhere in pre-trial motions on this question and ended up convicted by a jury this summer. Afterwards, in September, his attorney asked for a new trial-again, in part, based on claims the AEA is unconstitutionally vague. As the prosecutor’s response makes clear, the argument is not likely to win-but the attorney, Bruce Feder, scored rhetorical points in trying.

In addition to quoting Kau’s “unholy union” commentary, Feder reached back in time to invoke the words of Supreme Court Justice Oliver Wendell Holmes Jr. in a 1931 opinion. “Although it is not likely that a criminal will carefully consider the text of the law before he murders or steals,” Holmes wrote, “it is reasonable that a fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed. To make the warning fair, so far as possible the line should be clear.”

Sometimes, the line may not be sufficiently clear even to the law enforcers themselves. In one 2011 case in Maryland, for instance, a designer-drug prosecution was abandoned until a judge officially dismissed the charges – and the defendant proceeded to successfully sue for the return of property seized in the probe. This rare instance, perhaps, is more telling of the vagaries of the designer-drug crackdown than any protests of those targeted.

The man’s name is Mohd Abujamous, and his saga began on May 3, 2011, when a suspicious box containing five packages of an off-white powder arrived from China at a Howard County UPS store. Investigators, thanks to information from the people who arranged to have the package picked up, quickly got a search warrant to raid a warehouse in New Market, near Frederick. They found it operated “as a manufacturer, packager, and distributor of various designer drug products including bath salts and Spice,” according to court documents, and determined Abujamous ran it.

The warehouse was filled with incriminating evidence, including barrels and boxes of chemicals used in Spice and barrels of powder, an envelope in one of them labeled MDPV, which is used to make bath salts, along with lots of substance-filled packets labeled “not for human consumption.”

On May 27, 2011, Abujamous was charged with manufacturing and possessing with intent to distribute chemicals used in Spice, JWH-018, and JWH-073, which the DEA had temporarily banned under the AEA on March 1, 2011. The case languished for months, and Abujamous’ attorney, Richard Karceski, asked for it to be dismissed, pointing out that the “Government has done nothing, to include refusing to respond to defense counsel’s calls and e-mails.”

In November 2011, Abujamous instead was indicted for a different crime-introducing misbranded drugs into commerce-and shortly thereafter the Spice charges were dismissed by the prosecutor, Philip Jackson. The misbranding indictment was based on the “not for human consumption” Spice labeling and the fact that the bath salts packages did not say they contained MDPV.

Nearly a year passed after the indictment without any activity by the government. So in October 2012, Karceski moved to dismiss the indictment, pointing out that Abujamous’ right to a speedy trial was being violated. Jackson never responded, so, in late November, U.S. District Judge Catherine Blake ordered the indictment dismissed.

Abujamous was off the hook, after about 18 months of prosecutorial silence and inactivity. But his property taken during the raid-about $36,000 of industrial equipment, including a truck, cement mixers, and some packaging machines-was being kept by the government, and he wanted it back. Not getting any response to his requests, he ended up suing-and winning.

Judge Blake ordered the government to return Abujamous’ seized equipment in June. In doing so, she also denied attempts by Assistant U.S. Attorney Stefan Cassella, an expert on asset-forfeiture law, to have the case dismissed or put on hold – which, in the latter instance, was filed under seal, so Cassella’s arguments remained shrouded from public view.

Neither Karceski nor the U.S. Attorneys’ Office will provide insights as to what went on with this case. However, an August 2011 letter from Karceski to Jackson, included in case documents, sheds some light on the circumstances.

“My client has always said that he was never in violation of any federal law regarding the compounds with which he is charged,” Karceski wrote. “I request that you provide me with a detailed chemical analysis conducted by the forensic division of the DEA. A fair evaluation will show that the banned chemicals were not contained in the product seized, nor were they seized in bulk from my client.”

Today, Eugene Petasky is a humbled man, serving a 41-month prison sentence at West Virginia’s Morgantown Federal Correctional Institution after pleading guilty in U.S. District Court in Baltimore last fall to laundering drug money through his jewelry business, Metro Brokers, for nearly a quarter of a century. But on Nov. 8, 2006, when still a free man, Petasky spoke with apparent pride of his drug-world connections, sharing the details with an undercover cooperator in a sting operation that resulted in his indictment weeks later.

The account of Petasky’s litany of drug-world ties is contained in documents included in a civil forfeiture case, entered into the federal court record on April 7, in which the government is seeking to keep two firearms and ammunition seized from Metro Brokers during a November 2006 raid. To back up its forfeiture pleading, the government included a search-warrant affidavit written by Sharnell N. Thomas, a special agent with the U.S. Internal Revenue Service’s Criminal Investigation Division. The affidavit includes a paragraph describing Petasky’s conversation with the cooperator.

“Petasky discussed being associated with several drug traffickers,” Thomas wrote, including “Darryl Henderson, also known as ‘Bam,’ [who] would kill anyone that hurt Petasky.”

Thomas wrote that Petasky stated that he “paid Bam’s legal fees” and that “Bam was an associate of Greg Parker, a well known drug trafficker” in Baltimore. According to the affadavit, he also discussed another “well known” Baltimore drug dealer named “Ya Ya Brockington” and recalled selling “a large chain with a pool table encrusted with diamonds and rubies” to “an individual named ‘Wimpy,'” and “discussed the possibility that Wimpy was killed by another well known drug trafficker . . . Rudy Williams.”

While Thomas’ affidavit describes several of the drug-world figures cited by Petasky as “well known,” only one—Rudy Williams —may qualify as truly famous. The savage criminal career of Linwood “Rudy” Williams was the subject of a lengthy 1992 article in the Baltimore Sun by David Simon, who compared Williams to William Shakespeare’s dramatic and bloody portrayal of King Richard III. Simon’s piece includes an account of “Curtis ‘Wimpy’ Manns, who took Williams into his own drug organization, then ended his career as a corpse in Baltimore County, with partner and friend Williams as the prime suspect.”

In all likelihood, the “Wimpy” Petaski referred to was Manns. Williams, meanwhile, is serving his life sentence at the high-security United State Penitentiary—Canaan, near Scranton, Pa. Details of the other drug dealers Petasky mentioned—Darryl Henderson, Greg Parker, and Ya Ya Brockington—remain inscrutable as of press time.

Given the number of years that have passed since Williams and Manns were on the scene, Petasky’s 2006 boasts may have been more reminiscent of times past than of his contemporary stature on Baltimore’s mean streets. But that a man with Petasky’s trappings—records show he was a donor to Maryland politicians, drove luxury vehicles, had a diversified investment portfolio, and owned a nice home on Woodvalley Drive near Stevenson in Baltimore County—would claim such ties, even in vaunted rhetoric, speaks volumes of the drug culture’s reach into respectable circles.

Petasky’s past—he was previously convicted by a jury in 1990 in connection with a similar money-laundering scheme involving Metro Brokers and an attorney, Neil Steinhorn, who was also convicted—meant that he was prohibited from possessing firearms or ammunition. As part of Petasky’s plea deal, though, prosecutors dismissed the firearms charges, along with numerous other counts of financial crimes. He pleaded guilty to a single conspiracy count of money laundering, and agreed to forfeit $336,000 to the government as ill-gotten gains. Petasky is scheduled to be released from prison on Jan. 1, 2013.